A single step, rapid (<1 min), microwave driven, solution combustion technique is used to obtain luminescent, cubic ZrO2: Eu+3 nanophosphors. The high temperature cubic ZrO2 phase is obtained directly using L-serine amino acid as the fuel. The phase is stable, and shows no transformation on calcination (upto 800 degrees C, 2 h). The method presented here results in a final product with low concentrations of unintentional impurities (carbon < 0.65 at%, N < 0.09 at%, and no S); desirable for a luminescence host. Kisielowski's model based analysis suggests that Eu3+ is present in the lattice in concentrations as high as 2.5 mol%. The effect of calcination temperature (400, 600 and 800 degrees C) on optical and luminescent properties is investigated. Interestingly calcination of this material results in an increase in optical band gap (Delta Eg = 0.12 eV), strongly suggesting defect-induced Moss-Burstein (M-B) effect in as-synthesized sample. It is noteworthy that, this is the first report demonstrating defect induced M-B effect in microwave derived ZrO2. Using photoluminescence spectra based asymmetric ratio based analysis, it is observed that the increase in symmetry around the Eu3+ ion is concomitant with the increase in overall point-defect density (which in turn results in M-B effect). There is an increase in PL intensity with calcination, which is attributed to increased crystallinity.