Effects of side reactions during the formation of high quality colloidal nanocrystals were studied using ZnO as a model system. In this case, an irreversible side reaction, formation of esters, was identified to accompany formation of ZnO nanocrystals through the chemical reaction between zinc stearate and an excess amount of alcohols in hydrocarbon solvents at elevated temperatures. This irreversible side reaction made the resulting nanocrystals stable and with nearly unity yield regardless of their size, shape, and size/shape distribution. Ostwald ripening and intraparticle ripening were stopped due to the extremely low solubility/stability of the possible monomers because all free ligands in the solution were consumed by the side reaction. However, focusing on size distribution and 1D growth that are needed for the growth of high quality nanocrystals could still occur for high yield reactions. Upon the addition of a small amount of stearic acid or phosphonic acid, immediate partial dissolution of ZnO nanocrystals took place. Although the excess alcohol could not react with the resulting zinc phosphonic acid salt, it could force the newly formed zinc stearate gradually but completely back onto the existing nanocrystals. The results in this report indicate that side reactions are extremely important for the formation of high quality nanocrystals by affecting their quality, yield, and stability under growth conditions. Due to their lack of information in the literature and obvious practical advantages, studies of side reactions accompanying formation of nanocrystals are important for both fundamental science related to crystallization and industrial production of high quality nanocrystals.