Nanocrystalline as well as submicron sized, non-agglomerated, spherical ZrO2 particles have been successfully synthesized using the sol-gel technique utilizing hydroxypropyl cellulose (HPC) as a polymeric steric stabilizer. The effect of various parameters such as the ratio of molar concentration of water and alkoxide (R), the molar concentration [HPC] and the molecular weight (MWHPC) of HPC polymer as well as the calcination temperature on ZrO2 nanocrystallites size and their phase evolution behavior is systematically studied. The phase evolution behavior of nanocrystalline ZrO2 is explained and correlated with the adsorption behavior of HPC polymer on ZrO2 nanoparticles surface, which is observed to be a function of R, [HPC], MWHPC and the calcination temperature. Optimum synthesis parameters for obtaining 100% tetragonal phase in nanocrystalline ZrO2 are identified for the present sol-gel method of synthesizing nanoparticles.