Pure tetragonal zirconia nanoparticles (ca. 4.0 nm) possessing a narrow size-distribution were synthesized with an oil/water interface approach by adjusting various reaction parameters such as aging temperature, reaction time, and concentration of sodium hydroxide. The transmission electron microscopy images and X-ray powder diffraction patterns indicated that the shapes of tetragonal zirconia and monoclinic zirconia nanoparticles were spherical and spindle-like, respectively. The formation and transformation mechanisms of zirconia have been proposed from both of aspects of energy and time. Low temperature, appropriate reaction time and high concentration of sodium hydroxide are kinetically beneficial for the formation of tetragonal zirconia nanoparticles. The zirconia transformation from small spherical tetragonal nanoparticles to large spindle-like monoclinic nanoparticles (ca. 491.8 x 154.3 nm) happened due to the decline of their total surface energy with the increases of temperature and reaction time. Moreover, by the use of tetragonal zirconia seeds, formation of tetragonal zirconia nanocrystals was obviously promoted and that of monoclinic zirconia nanocrystals was markedly inhibited, suggesting the non-aggregation and surface-deposition growth of tetragonal zirconia nanocrystals.