The relationships among bending strength, compositions, fracture toughness, hardness, and grain size of Ce-Y-TZP ceramics are explored. The addition of YO1.5 enhances the strength of Ce-Y-TZP, yet the effect of CeO2 content on strength is dependent on the yttria amount. It is believed that the effect of ceria and yttria on the strength Ce-Y-TZP is due to the occurrence of deformation plasticity and the variation of grain size. The morphology of fracture surface of Ce-Y-TZP after bending test changes from mostly intergranular fracture into mostly transgranular fracture with the increasing yttria content. The samples which exhibit intergranular fracture usually possess higher toughness and lower fracture strength. After 1000 h hydrothermal aging in water at 200 °C, as the YO1.5 contents in the 5.5 mol% CeO2-TZP and the 8 mol% CeO2-TZP are more than 4 and 2 mol%, respectively, no low temperature degradation is observed on the as-aged surface of Ce-Y-TZP with grain size of 0.7–1.1 mm. According to the present study and previous results in literature, a boundary line to distinguish the stable and unstable t phases is proposed.