To obtain powder with a composition of 3 mol% Y2O3-97 mol% ZrO2, a process of Y-Zr oxalate powder production has been optimized, to produce an oxalate with minimal particle size. The methodology of the nonisothermal decomposition of Y-Zr oxalate has been explained. Characteristics of the nonisothermal decomposition of different oxalates have been studied. Nanocrystalline Y2O3-stabilized ZrO2 (YSZ) powder with a narrow size distribution of primary particles and aggregates was produced. The zirconia powder that was obtained from the smallest osalate powder via nonisothermal decomposition had a particle size of 8-10 nm, The YSZ powder was weakly aggregated, with a narrow aggregate-size distribution of 70-90 nm.