Electron-beam physical-vapor-deposited thermal barrier coatings consisting of ZrO2 stabilized by 7 wt% Y2O3 were investigated in regard to phase transformation after annealing, Free-standing ceramic layers were heat-treated in air, for up to 200 h, in the temperature range 1200 degrees-1400 degrees C and then analyzed by X-ray diffractometry, Based on information obtained from the {111} and {400} peaks, the phase composition and the Y2O3, content in the phases were calculated. At the start of transformation, small grains of a low-Y2O3 t phase and a c phase formed. After >30 h at 1300 degrees C and at 1400 degrees C, a mixture of a t phase deficient in Y2O3 an m phase, and a c phase formed after cooling, with the Y2O3 contents in the phases roughly predicted by the phase diagrams. The results of the present study are discussed here in detail and compared with data for plasma-sprayed coatings.