Direct electro-deoxidation of metal oxides has become quite popular in the production of metals and alloys. In this process, metal oxide cathode is directly reduced to a metal in a molten CaCl2 salt bath. The anode material used is graphite. Over the years, graphite is reported to cause numerous process difficulties. Recently, based on the solid oxide membrane technology, yttria-stabilized zirconia (YSZ) has been tested as oxygen ion conducting membrane for the anode. The success of using a membrane implies its long-term stability in the bath. In this paper, it is seen that YSZ chemically degrades in a static melt of CaCl2 or CaCl2-CaO. The degradation occurs by leaching of yttria into solution leading to the formation of monoclinic zirconia which, being porous, reacts with the molten electrolyte to form calcium zirconate. However, on application of voltage, YSZ degrades via a different mechanism. The metallic calcium produced during electrolysis increases the electronic conductivity of the salt, apparently leading to the electrochemical reduction of zirconia to ZrO2-x. As a result, localized pores are formed which allow the infiltration of salts. Addition of yttria to the salt is seen to prevent both the chemical and electrochemical degradation of the membrane.