Zirconia toughened ceramics, such as magnesia partially stabilized zirconia (Mg-PSZ), have received considerable attention due to their high strength and fracture toughness [1]. These properties are a consequence of stress-induced microstructural changes which inhibit crack propagation and provide a degree of ‘damage tolerance1 not common to other ceramic materials. Ultrasonic testing can aid in the characterization of microstructural changes associated with transformation plasticity [2]. The present paper presents measurements of ultrasonic velocity as a function of microstructural damage in Mg-PSZ loaded in compression at high strain rates. Observed changes in elastic moduli are compared to a model of a solid containing randomly distributed penny-shaped microcracks which are all oriented parallel to the axis of compression.