Y-TZP powders were prepared either by calcination in air or crystallization under hydrothermal conditions of a hydrous gel, obtained by coprecipitation. Differences in powder properties, green compact structure and sinterability were examined. Crystallization under hydrothermal conditions occurs at temperatures as low as 190°C in the presence of ammonia. The hydrothermally treated powders are composed of soft agglomerates, that collapse under very low pressures, resulting in green bodies with high densities and small pore radii. The sinterability is greatly improved by the hydrothermal treatment and allowed the production of dense, nanostructured Y-TZP by free sintering at 1050°C.