We report the synthesis of highly dispersible zirconia (ZrO2) nanoparticles in sub-kilogram-scale by hydrothermal process coupled with alkaline hydrogen peroxide (AHP) treatment, with detailed studies on the effects of experimental parameters. Under optimized experimental condition, which was hydrothermal reaction at 110 degrees C for 6 h with mole ratio of sodium hydrate to zirconium carbonate basic in reactants as 2.3, pure-phase cubic-ZrO2 nanoparticles are obtained. Followed by AHP treatment of the ZrO2 nanoparticles at 50 degrees C for 5 h in 0.4 M hydrogen peroxide and 4 M sodium hydrate, the dispersibility of ZrO2 nanoparticles in aqueous suspension was enhanced due to the introduced Zr-OH groups on the surface. ZrO2 nanodispersion with solid content of 37 wt% in aqueous solution exhibited a uniform hydrodynamic size of 14.15 +/- 5.834 nm and was stable for over six months without significant aggregates. Transparent hybrid optical resins with tunable refractive index in the range of 1.55-1.71 were prepared by solution blending method using ZrO2 nanoparticles as composite fillers in polyvinyl alcohol substrate. Compared with pure polyvinyl alcohol resin, the hybrid resin exhibits significant enhanced mechanical properties. Sub-kilogram-scale preparation of highly aqueous dispersible ZrO2 nanoparticles offers possibility for practical applications.