In the work we describe the use of Al2O3–Y2O3 glass microspheres with high alumina contents prepared by flame synthesis as a precursor for materials with binary eutectic microstructure and high hardness. XRD amorphous microspheres with eutectic composition in a pseudobinary system Al2O3–Y3Al5O12 (YAG) were prepared by feeding a crystalline powder precursor of respective composition into methane-oxygen flame. The microspheres with the mean diameter ≈10 μm were hot-pressed in vacuum under various conditions (temperatures 840-1600°C, pressure 30 or 40 MPa, isothermal dwell 0-120 min). Hot pressing at 1600 °C without isothermal dwell yielded fully dense bulk materials with fine two phase microstructure with Al2O3 and YAG phases percolating at submicrometre level and with hardness 15 GPa. Extension of the isothermal dwell resulted in undesirable coarsening of the resulting microstructure.