The effect of ceria doping of (ZrO2)1-x(Sm2O3)x crystals on their phase composition, microhardness and fracture toughness has been studied. The (ZrO2)0.995-х(Sm2O3)х(СеО2)0.005 crystals (where x = 0.032, 0.037 and 0.04) have been grown using directional melt crystallization in cold skull. The phase composition and structure of the crystals have been studied using X-ray diffraction, TEM and Raman spectroscopy. The mechanical properties such as microhardness and fracture toughness have been studied using Vickers indentation. It has been shown that the (ZrO2)0.995-х(Sm2O3)х(СеО2)0.005 solid solution crystals contain both Се4+ and Се3+ ions. Phase analysis data suggest that СеО2 doping increases the tetragonality degree of the transformable t phase and reduces the tetragonality degree of the non-transformable t' phase as compared to the (ZrO2)1-x(Sm2O3)x crystals. As a result, the t→m phase transition triggered by the indentation-induced stress in the СеО2 doped crystals is more intense and covers greater regions. СеО2 doping of the solid solutions increases the fracture toughness of all the crystals studied whereas the microhardness of the crystals changes but slightly. СеО2 doping of the (ZrO2)1-х(Sm2O3)х solid solutions in the experimental concentration range does not improve the high-temperature phase stability of the crystals and does not prevent high-temperature degradation of their fracture toughness.