Zirconia-alumina multilayer films consisting of polycrystalline tetragonal zirconia and amorphous alumina were grown by reactive sputter deposition to study the transformation behavior of tetragonal zirconia nanocrystallites during in-situ electron beam irradiation and cooling experiments in a transmission electron microscope. It was found that the constraint provided by the alumina layers in the nanolaminate was important in the stabilization of the tetragonal phase of the zirconia during irradiation and cooling, and overrides the thermodynamic prediction based on an unconstrained crystallite model which governs the phase composition of zirconia crystallites during growth. A partial transformation of the tetragonal zirconia crystallites to the monoclinic phase was observed in cases where the alumina constraint is greatly relaxed due to knock-on damage to the alumina layers by the electron beam of the microscope. In extreme cases of alumina loss, re-crystallization of the zirconia occurred producing larger monoclinic zirconia crystallites. Fundamentally, the nano-sized zirconia crystallites present in the films under investigation were found to have a different transformation behavior compared to micron-sized dopant-stabilized tetragonal zirconia crystallites.