Powders composing of La2Zr2O7 (LZ) and (Zr0.8Y0.2)O1.9 (10YSZ) phases (volume ratio = 1:1) were synthesized by using a sol-spray pyrolysis method. The effects of annealing temperature on the grain size and lattice parameter of the LZ–10YSZ powders were investigated. XRD results showed that the grain size of LZ and 10YSZ phases gradually grew from 10 to 95 nm and from 5 to 65 nm as the annealing temperature elevated from 900°C to 1200°C. The relative decreasing percentage of grain size comparing to that of the single-phase LZ and 10YSZ powders were in the range 9%–36% and 37%–86%. The activation energy for grain growth of LZ and 10YSZ phases in the composite powders were 225 ± 12 and 382 ± 17 kJ/mol, which were 20% and 183% higher than that of the single-phase counterparts. Obvious lattice contraction and lattice expansion for LZ and 10YSZ phases were observed at temperatures below 1100°C, respectively. SEM results revealed that LZ and 10YSZ phases were homogeneously distributed in the sintered bulk. The TEM results suggested that the grain growth was affected by the interaction on nanometer length scales of grain boundaries between LZ and 10YSZ phases in the composite.