ZrOCl2•6H2O and Y(NO3)3 were used as raw materials to fabricated Y2O3 stabilized ZrO2(YSZ) nanopowders by hydrothermal method. The addition of Y2O3, different precipitants, different hydrothermal temperatures and times were studied. XRD and TEM were employed to characterize phase compositions, grain sizes and lattice parameters of the as-prepared YSZ nanopowders. The results show that less than 10nm and well crystallized cubic YSZ were obtained under a certain experimental conditions. Different precipitants affect the formation of precursors and final products. The addition of NaOH is benefit to the growth of YSZ crystals with the max grain size and the minimum lattice distortion among the three kinds of precipitants. Amorphous YSZ powders are obtained at lower hydrothermal temperature of 150°Cfor longer treating time of 6h. However, when the hydrothermal temperature is elevated at 180°C, well crystallized YSZ powders are prepared only treated for 2h.