Thermal conductivity of zirconia and yttrium stabilized zirconia (YSZ) is calculated with perturbation molecular dynamics method (PMD). The results showed that thermal conductivity of YSZ is lower than that of pure zirconia and PMD is a very effective way in thermal conductivity calculation for ceramics. In higher temperature region, the calculated values show a different tendency with the experiment ones, which is because that photon conduction is not considered in PMD method. By taking photon effects into account, the calculated thermal conductivity curve is found fairly well coherent with measurements. In addition, the thermal expansion of zirconia is also presented by calculating the volumes at different temperatures. The results and methods in this paper have been proved to be very helpful in further design of new ceramic materials in the field of thermal barrier coatings (TBCs).