The ageing behaviour of unequilibrium tetragonal (t’) phase and its resultant effect on the mechanical properties of hot-pressed ZrO2(4 mol % Y2O3) ceramic have been investigated by means of transmission electron microscopy (TEM), scanning electron microscopy (SEM) and X-ray diffractometry (XRD). Experimental results show that t’-phase which is the product of diffusionless transformation from cubic (c) phase during rapid cooling after sintering is unstable when aged in a temperature range of 1400-1600 degrees C for up to 80 h in that it decomposes diffusionally into equilibrium tetragonal(t) phase and c-phase. Yttria contents of phases formed during decomposition are basically in agreement with those indicated by phase diagram. The stability of t’-phase characterized by the existence of anti-phase domain microstructure under the microscopic dark field image is significantly associated with the tetragonality(cla) measured by XRD and the larger the tetragonality, the more unstable the t’-phase. Metastable precipitates of t-phase a re triggered by applied stress to transform to monoclinic (m) phase during which the fracture toughness is enhanced and transformability of t-phase is critically dependent upon the solute content as well as size. It is found that when t’- and m-phase coexist with adequate fractions of c- and t-phase, the fracture toughness of the aged specimen demonstrates a peak value that moves to shorter ageing times with increasing temperature while the Vickers hardness decreases monotonically with ageing time regardless of ageing temperature due to grain growth.