Hydrous zirconia was prepared at low pH values with ZrOCl2 ¤8H2O as raw material, H2O2 as hydrolysis promoter and ethanol as solvent. FT-IR, TG and XRD were applied to study the components, structure and heat-stabilization of hydrous zirconia. Light microscope and FESEM were used to analyze the microcosmic structure of hydrous zirconia, its formation mechanism was also discussed. The results show that the molecular formula of hydrous zirconia is Zr(| OH)2(OH)2 ¤2H2O. The hydrous zirconia is amorphous, and as the treating temperature rising, it will turn from metastable tetragonal phase to monoclinic phase. The hydrous zirconia is fiber cluster composed of small short fibers via hydrogen bonds.