Zirconia coated NiO powders were prepared by the thermal hydrolysis of $Zro(NO_3)_2$.$6H_2O$ in a mixed solvent of alcohol and water. Amorphous zirconium hydroxide was uniformly coated on the surface of NiO powder with the thickness of 20nm. The $ZrO_2$ coating layer was crystallized to tetragonal $ZrO_2$ with the size of 40-60nm at $900^{circ}C$. The coated NiO powder containing 15 vol% $ZrO_2$ was found to have a similar isoelectric point to that of the $ZrO_2$ The grain growth inhibition effect of the coated powders was superior to the mechanically mixed powders.