The interface between yttria-stabilized zirconia (YSZ) substrate and YBa2Cu3O7 (YBCO) film was studied by high-resolution electron microscopy. In all specimens we have observed an intermediate layer of BaZrO3 located between the substrate YSZ and YBCO. The BaZrO3 layer is composed of almost equally aligned domains being 4–8 nm in the lateral directions. Reaction products such as Y and Cu oxides were never observed in or close to the BaZrO3 reaction layer but they do occur in the YBCO film. The stacking sequence of BaZrO3/YBCO is predominantly (BaZrO3)-ZrO2-BaO/CuO-BaO-(YBCO) with CuO layer as the beginning YBCO layer. Sometimes a stacking sequence (BaZrO3)-ZrO2-BaO/BaO-CuO2-(YBCO) with a BaO layer as the beginning YBCO layer was observed. This stacking is related to a dislocation with Burgers vector a'/2 , where a' = 0.42 nm is the lattice constant of the cubic BaZrO3. Three main epitaxial relations (0°, 45°, 9°) between YSZ and YBCO were observed. These can be explained by near-coincidence site lattices σ = 25, σ = 49 and σ = 13 (for a YSZ substrate). Usually the (001) plane of the YBCO film is parallel to the (001) plane of the BaZrO3 layer and parallel to the substrate surface. In case YBCO is grown on an inclined YSZ substrate, the (001) plane of the YBCO film is parallel to the substrate surface and thus not parallel to the (001) plane of the YSZ substrate.