Stability and mechanical properties of the tetragonal phase were investigated for NiO-doped yttria-stabilized tetragonal zirconia polycrystal (Y-TZP) systems. Only 0.3 mol% of NiO in solid solution could be added to the Y-TZP while maintaining the tetragonal phase. Fracture toughness improved remarkably on addition of a small amount of NiO. Raman spectroscopy analysis around cracks introduced by Vickers indentation revealed that the amount of monoclinic phase transformed from tetragonal phase was increased. It was confirmed that fracture toughness improvement was due not only to increased grain size, but also to Y-TZP destabilization by solid solution of NiO.