The properties of the powders of ZrO2-MgO system prepared by co-precipitation method using ZrOCl2.8H2O and MgCl2.6H2O as starting materials were investigated after calcination from $600^{circ}C$ to 120$0^{circ}C$. The crystallization temperature of amorphous ZrO2 was increased as MgO contents increased. The crystallite size of ZrO2 was increased with increasing calcination temperature. The crystallite size of tetragonal ZrO2 calcined at 100$0^{circ}C$ for 1hr wa about 45nm, and MgO contributed effectively to promoting stability of tetragonal Zirconia.