Granulation is an essential step to improve the flowability of submicrometer and nanometric ceramic powders to make them suitable for industrial die pressing. Controlled agglomeration of yttria-stabilized zirconia nanopowders with a primary particle size of similar to 16 nm was carried out using two different routes, viz. spray drying (SD) and spray freeze drying (SFD). SD yielded flowable, but hard granules while SFD produced flowable and crushable (soft) granules suitable for die pressing applications. The flowability was characterized using the Carr index and Hausner ratio and benchmarked with commercially available granulated submicrometer powder. Better flowability was achieved when SFD was performed from a high solid content suspension. The fracture surface of uniaxially die-pressed green bodies from spray freeze-dried granules showed a homogeneous microstructure, while the spray-dried granules had not lost their identity even when compacted at high applied pressures in the range of 380 MPa. The granule strength was studied from the compaction curves. Mercury intrusion porosimetry showed interagglomerate and intraagglomerate pores in the case of spray-dried powder compacts. The presence of hard granules resulted in extensive grain growth during the sintering stage and was deleterious for the final properties of the ceramics.