Pure ZrO2 and MoO3 (10 mol%)-ZrO2 nanocomposite oxides were prepared by solution combustion method using glycine as fuel. The synthesized materials were characterized by X-ray diffraction (XRD), Scanning Electron microscopy (SEM). Transmission electron microscopy (TEM) and UV-vis spectroscopic technique. XRD study revealed selective stabilization of the tetragonal phase of zirconia in presence of MoO3. The crystallite size was calculated from the Fourier line shape analysis of the broadened X-ray diffraction profiles as well as from TEM measurements. Oxide nanoparticles with size in the range of 5-40 nm was observed depending upon the fuel content in the combustion mixture. UV-vis study indicated well dispersion of the molybdenum oxide component in the zirconia matrix in the form of isolated and cluster molybdates. The MoO3-ZrO2 nanocomposite oxide was used as an efficient and environmentally benign catalyst for the synthesis of octahydroquinazolinones by multicomponent condensation reaction of dimedone, urea and arylaldehydes in aqueous media as well as under solvent free condition using microwave irradiation. A series of zirconia based heterogeneous catalyst with different acidity and surface area were screened for this reaction. The MoO3 (10 mol%)-ZrO2 catalyst was found to be highly active for the transformation with excellent yield and purity of the product in a short reaction time. (C) 2011 Elsevier B.V. All rights reserved.