Genesis of the structure of zirconia fine particles prepared by precipitation of amorphous hydrated zirconia by ammonia from the ZrO(NO3)2 solution followed by a mild hydrothermal treatment (HTT) of precipitate, washing and calcination under air up to 1000 °C has been studied by HRTEM, X-ray diffraction, Raman and FTIRS. HTT rearranges the structure of amorphous zirconia, which helps to obtain nearly single-phase monoclinic nanozirconia (particle size 5-15 nm) after a mild calcination at 500 °C. Dehydroxilation and sintering of these nanoparticles at higher (600-650 °C) temperatures generate polysynthetic (001) twins. Modeling revealed that reappearance of the (111) “cubic” reflex in XRD patterns of samples calcined at 600-650 °C can be due to these extended defects. In their vicinity, the seven-fold Zr-O coordination sphere is retained, while packing of ZrO7 polyhedra is varied towards more symmetric structures, thus causing disappearance of the Raman spectra.