Nanocrystalline zirconia powders in pure form and doped with yttria and calcia were prepared by the precipitation method. In the as-prepared condition, all the doped samples show only monoclinic phase, independent of the dopants and dopant concentration. On annealing the powders at 400 °C and above, in the case of 3 and 6 mol% Y2O3 stabilized ZrO2 (3YSZ and 6YSZ), the monoclinic phase transforms to tetragonal and cubic phases, respectively, whereas in 3 and 6 mol% CaO stabilized ZrO2 (3CSZ and 6CSZ), the volume percentage of the monoclinic phase gradually decreases up to the annealing temperature of about 1000 °C and then increases for higher annealing temperatures. The presence of monoclinic phase in the as-prepared samples of doped zirconia has been attributed to the lattice strain effect which results in the less symmetric lattice. For the annealing temperatures below 1000 °C, the phenomenon of partial stabilization of the tetragonal phase in 3CSZ and 6CSZ can be explained in terms of the grain size effect. High resolution transmission electron microscopy (HRTEM) observations reveal the lattice strain structure in the as-prepared materials. The particles are found to be a tightly bound aggregate of small crystallites with average size of 10 nm. The morphology of the particles is observed to be dependent on the dopants and dopant concentration.