Reactive sputtering on metallic Zr target under various oxygen flow rates was employed to produce nanocrystalline zirconia condensates, which were collected on a carbon-coated collodion film for analytical electron microscopic observations. With an Ar flow rate of 28 seem, the collected condensates are cubic and tetragonal (t-) zirconia less than 10 nm in size under 0-2 seem oxygen flow rate and increased to 10-20 mn in size with partial t- to monoclinic (m-) zirconia transformation at 3 seem. Between 4 and 4.5 sccm, t-zirconia polycrystals (TZP) about 20 nm in grain size were formed by coalescence of the t-zirconia condensates. Above 6 seem, the (111) and {100} specific coalescence as well as random attachment prevailed to form larger (> 30 nm) individual condensates of m-zirconia as the critical size of martensitic t-m transformation is exceeded. The UP formation can be accounted for by the small grain size, the presence of low-valence Zr cation and the lateral constraint of neighboring grains. (c) 2005 Elsevier B.V All rights reserved.