The effects of substrate temperature and composition target on the optical and structural properties of ZrO2-Y2O3 films have been investigated. The refractive index, extinction coefficient, packing density, inhomogeneity and structure are reported for substrate temperature range 150-400 degrees C. It was found that pure zirconia layers grew preferentially towards the monoclinic (11 (1) over tilde) direction. The intensity of this monoclinic peak increases with increasing substrate temperature. The admixture of amounts of yttria to the zirconia matrix results in films having a single crystalline cubic phase. In the stabilized zirconia, the presence of molecules of the Y2O3 dopant reduces the effect of substrate temperature on the film properties with regard to the pure ZrO2 material. The maximum refractive index (n = 2.19 at lambda = 750 nm), nearly unity packing density and better homogeneity have been obtained from the sample containing 8 wt.% Y2O3 for substrate temperature of 400 degrees C, The extinction coefficient in the order of 10(-3) is reported in the visible spectrum, which makes the films useful for some optical applications.