Mechanically activated reaction of anhydrous chloride precursors with Li2O has been used to synthesise ultrafine powders of ZrO2, Mg-PSZ, and Y-TZP. In each case, milling of the reactant mixtures resulted in a combination of amorphisation and overall microstructural refinement. Chemical reaction, with the consequent formation of nanoparticulate zirconia and LiCl, only occur-red during subsequent low temperature heat treatment. The mechanism of reaction was found to depend on the heating rate and also on the presence of LiCl diluent in the initial reactant mixture. In addition to altering the reaction mechanism, the addition of diluent decreased the average crystallite size and increased the proportion of single crystal particles in the final zirconia product. Accompanying the decrease in average particle size with dilution was an increase in the tetragonal volume fraction. (C) 2001 Acta Materialia Inc. Published by Elsevier Science Ltd. All rights reserved.