Because of its outstanding mechanical properties, zirconia-based ceramics are considered as some of the best potential materials within the engineering ceramics field that might be widely used to substitute various metallic parts and specific alloys. Taking into account the transformation toughening mechanisms that operates in their microstructure, important properties can be obtained. Phase transitions as well as transformation toughening in ZrO2 are reviewed briefly with the purpose to understand its effects in some composites and glass systems. Zirconia ceramics as high toughness materials for cutting tool, metal forming applications, mechanically superior ceramics called partially stabilised zirconia (PSZ), solid electrolytes, have been fabricated using the martensitic nature of the tetragonal to monoclinic phase transition.