The effect of yttria content on structural and thermal stability of zirconia in yttria-stabilized zirconia (YSZ) polycrystalline ceramics was systematically investigated by Raman spectroscopy and X-ray photoelectron spectroscopy. Taking advantage of an experimentally retrieved linear dependence of Raman bandwidth on yttria content, Raman imaging was applied as an effective tool in examining the local yttrium distribution in YSZ ceramics and its relationship with environmentally driven polymorphic transformation. A significant variation of monoclinic fraction with yttria content and temperature was found and interpreted according to a newly proposed model, which takes into account the change in lattice hydroxyl and oxygen vacancies and the possible formation of stable defect complexes.