In this contribution, well-size-distributed nanopowder of 8YSZ:Eu 3+ composite oxide was synthesized by hydrothermal method. TG-DSC, SEM, TEM and XRD were applied to characterize the thermal decomposition, morphology and crystal structure of nanopowder. The thermal stability of the powder was investigated by thermal treated at temperatures ranging from 500°C to 1300°C for 2h. Fluorescence properties variation and phase composition variation of the powder were investigated after thermal exposure at 1300°C for 192h. The relationship between the phase composition variation and fluorescence properties variation was further examined. The results show that when monoclinic phase is absent, the intensity ratio I 593 /I 608 of fluorescence spectroscopy can be used to preliminary assess the extent of the phase transformation.