High-resolution transmission electron microscopy (HRTEM) has been used to characterize the morphology and the surface structure at an atomic level of sulfated zirconia and sulfate-free zirconia. Our study shows that HRTEM can be used to directly observe sulfate layers adsorbed on the surface of zirconia crystallites. The results indicate that the presence of sulfate groups not only stabilizes the tetragonal zirconia phase, but also induces the formation of well-faceted small zirconia crystallites. In particular, it is observed that the presence of sulfate groups induces the preferential formation of relatively long-flat (110) plane of tetragonal zirconia. HRTEM images of this plane revealed the presence of an adsorbed sulfate layer. It is proposed that the geometry of the (110) plane is such that it can accommodate sulfate groups in a two- or threefold coordination. Although, zirconia crystallites with relatively long-flat {110} planes containing adsorbed sulfate-groups were clearly predominant in the sulfated zirconia catalyst; its role in the formation of the highly acidic sites is not clear. Our study also reveals the presence of few zirconia crystallites containing rough surfaces, crystallographically speaking high-Miller-index surfaces, which if they were to contain sulfate groups, they could be the locus of the highly acidic sites. Thus, it is suggested that caution must be taken when performing spectroscopic studies using techniques such as IR, NMR, XPS, and Raman to distinguish between spectator sulfate groups, which could be a majority if they were the ones observed on the (110) plane, and those participating in the formation of the highly acidic site, which could be associated to the few high-Miller-index-containing zirconia crystallites.