The purpose of this paper was to investigate the effect of a high-energy milling (HEM) process on the particle morphology and the correlation between a thermal treatment and tetragonal/monoclinic nanostructured zirconia powders obtained by a precipitation process. To eliminate chloride residue ions from hydrous zirconia, a modified washing method was used. It was found that the used washing method was effective in removing the chloride from the precipitated gel. In order to investigate the effect of a pre-milling process on the particle morphology of the precipitate, dried $Zr(OH)_4$ was milled using a HEM machine with distilled water. The particle size of the $Zr(OH)_4$ powder exposed to HEM reduced to 100~150 nm, whereas that of fresh $Zr(OH)_4$ powder without a pre-milling process had a large and irregular size of 100 nm~1.5 ${mu}m$. Additionally, modified heat treatment process was proposed to achieve nano-sized zirconia having a pure monoclinic phase. It was evident that two-step calcining process was effective in perfectly eliminating the tetragonal phase, having a small average particle of ~100 nm with good uniformity compared to the sample calcined by a single-step process, showing a large average particle size of ~300 nm with an irregular particle shape and a broad particle size distribution. The modified method is considered to be a promising process for nano-sized zirconia having a fully monoclinic phase.