The preparation of $Y_2O_3$-doped $ZrO_2$ nanoparticles in Igepal CO-520/cyclohexane reverse micelle solutions is studied here. In this work, we synthesized nanosized $Y_2O_3$-doped $ZrO_2$ powders in a reverse micelle process using aqueous ammonia as the precipitant. In this way, a hydroxide precursor was obtained from nitrate solutions dispersed in the nanosized aqueous domains of a microemulsion consisting of cyclohexane as the oil phase, with poly (oxyethylene) nonylphenylether (Igepal CO-520) as the non-ionic surfactant. The synthesized and calcined powders were characterized by thermogravimetrydifferential thermal analysis (TGA-DTA), X-ray diffraction analysis (XRD) and transmission electron microscopy (TEM). The crystallite size was found to nearly identical with an increase in the water-to-surfactant (R) molar ratio. A FTIR analysis was carried to monitor the elimination of residual oil and surfactant phases from the microemulsion-derived precursor and the calcined powder. The average particle size and distribution of the synthesized $Y_2O_3$-doped $ZrO_2$ were below 5 nm and narrow, respectively. The TG-DTA analysis showed that the phase of the $Y_2O_3$-doped $ZrO_2$ nanoparticles changes from the monoclinic phase to the tetragonal phase at temperatures close to $530^{circ}C$. The phase of the synthesized $Y_2O_3$-doped $ZrO_2$ when heated to $600^{circ}C$ was tetragonal $ZrO_2$.