Abstract: A method to produce ZrO₂ nano-particles is developed and the effect of particle size on the phase structure of ZrO₂ is studied. The method is based on the hydrolysis of ZrOCl₂ solution in the reverse micelles of a liquid-liquid two-phase system, in which AOT (sodium 2-ethylhexyl sulfosuccinite) and toluene are chosen as the surfactant and organic phase, respectively. The reverse micelles prevent the aggregation of primary particles, the nano-particle size increases as the AOT content decreases. The TEM,XRD and particle-size analysis results show that the occurrence of metastable tetragonal ZrO₂ is attributed to the effect of the particle size other than the effect of the crystallite size. The ratio of t-phase to m-phase increases as the particle size decreases, and 28 nm is the critical size for t-phase to m-phase transformation.