The local geometric and electronic structure around a zirconium atom substituted for yttrium in Y2O3 was investigated both experimentally and theoretically. X-ray-absorption measurements were performed at the Y and Zr K and L(II) edges, in the extended x-ray-absorption fine-structure and x-ray-absorption near-edge-spectroscopy (XANES) regimes. The main results show a sixfold coordination of Zr, like Y, and a contraction of the Zr-O distances compared to the Y-O ones. The XANES spectra are well reproduced by the calculated local densities of states around Y and Zr in the conduction band, with p and d character. The theoretical approach relies on a semiempirical self-consistent tight-binding method performed on clusters of increasing sizes centered around either Y or Zr. Our calculation shows that, when substituting Zr for Y in Y2O3, localized electronic levels do not appear in the band gap, as the energy difference between the O 2p and the cation 4d electronic levels is not changed. As the distance contraction around Zr increases the electron-delocalization effects, an increase of the charge transfer between anion and cation is obtained, leading to a more covalent bond. A preliminary understanding of the compensating charge around the doping Zr atom is given: the additional valence electron is almost equally shared between Zr and its Y neighbors.