An experimental investigation is carried out to coat two types of carbide powders, TiC and (W, Ti) C, with an alumina ceramic using a sol-gel technology. The coated carbide powders are then fabricated into two kinds of new ceramic tool materials by the hot pressing method. A scanning electron microscopy (SEM) observation reveals that the matrix (carbide) grains are uniformly coated with the alumina ceramic and the new tool materials have a homogeneous microstructure. The tests of mechanical properties and wear resistance in machining are finally conducted. It is shown that the new tool materials can increase the tool-life by up to 100% as compared to other ceramic tool materials when machining a mild carbon steel, while the fracture toughness is improved by up to 33%. When compared with a hard coated carbide tool, the new materials exhibit a superior ability in maintaining the wear resistance during the entire tool-life.