Dense mullite aggregates with 72% Al2O3 have been synthesized by reaction sintering of two varieties of Indian bauxite and silica sol. The bauxites used are of inferior grade with different levels of accessory impurities such as Fe2O3, TiO2, CaO. The phase and microstructure development of sintered samples were investigated by XRD and SEM. It was found that morphology of the sintered grain is very much dependent on the impurity level. Mullite formed from bauxite-1 with low impurity is mostly equiaxed, whereas mullite developed from bauxite 2 with higher impurity particularly CaO is needle shaped. Presence of CaO in bauxite was found to be more detrimental than TiO2 and Fe2O3.