ZrO2-Y2O3 (5%) gel was synthesized by the hydrolytic polycondensation reactions of zirconium propoxide and yttrium chloride. The transformation of the gel on heating, examined by differential thermal analysis, thermogravimetric analysis and X-ray diffraction, is reported and discussed. The studied gel crystallizes directly into metastable tetragonal phase at low temperatures. This phase keeps stable up to a temperature of 1200 degrees C.