A two-reverse-microemulsion precipitation technique was applied to synthesize nanocrystalline tetragonal zirconia using H2O solution\CTAB\hexanol as the microemulsion system. Two solutions of reverse microemulsion, one containing Zr4+ aqueous droplets and the other aqueous ammonia droplets with the same water\surfactant ratio, were prepared separately and mixed together to form a slurry of nanosized ZrO2 precursors, which filled the matrix of the surfactant, CTAB. The precursors were recovered, calcined to form nanocrystalline zirconia powder, and then characterized by using a transmission electron microscope to determine the particle size, a scanning electron microscope to examine the microstructure of the zirconia powder, and an X-ray diffractometer to determine the crystal phase and crystallite size. It is concluded that the primary particle size of the precursor determines the transformation temperature of the precursor and the crystal structure of the calcined zirconia.