Silicon nitride based ceramics are widely used in the chemical industry and high-temperature applications due to their chemical inertness under specific harsh conditions. Their mechanical properties, meanwhile, remain almost unchanged. This work aimed to study the effects of the sintering mode, namely, the sintering temperature and isothermal holding time on the evolution of the phase composition and formation of fine-grained microstructure of Si3N4–Y2O3 ceramics. The initial Si3N4 and Y2O3 powders were used to fabricate ceramic samples. The percentage of Y2O3 powder was chosen to be 10 wt% for all the studied modes. The samples were undergone conventional sintering in a nitrogen atmosphere. The sintering temperatures were set as 1650, 1700, and 1750 °C, whereas values of the isothermal holding time for the sintering temperature of 1700 °C were set as 2 and 5 h. The sintered samples possessed different densities and porosities. Accordingly, their phase compositions changed significantly with the sintering temperature and isothermal holding time changes. This, in turn, affected the mechanical behavior of the materials. In particular, the optimum combination of hardness, fracture toughness, and strength was found for the Si3N4–Y2O3 ceramic samples sintered at 1700 °C for 5 h. Based on the results of this study, prerequisites for the formation of fine-grained Si3N4–Y2O3 ceramic microstructure with improved mechanical characteristics were substantiated.