Zirconia ceramics, as a category of metal oxide ceramics, stand out due to their impressive physicochemical and mechanical properties. Recognized for being bioinert, these ceramics are non-toxic, exhibit excellent biocompatibility, and offer superior mechanical strength. Moreover, zirconia’s natural aesthetic qualities enable it to closely mimic the appearance of natural teeth, making it an optimal choice for dental restorations, such as crowns, bridges, and veneers. This review examines the complex relationship between zirconia’s microstructure, including aspects like grain size, porosity, and phase composition, and how these factors impact its translucency and mechanical durability. A specific focus is on the critical role of the tetragonal phase in zirconia, spotlighting its contribution to the material’s superior mechanical strength and esthetic qualities. The stabilization of this phase, primarily through the use of yttria, is discussed for its dual influence on enhancing both the material’s strength and esthetic properties. Challenges such as low-temperature degradation (LTD) and discoloration are highlighted, along with potential solutions like advanced surface modifications and novel manufacturing techniques. The potential of flash sintering and 3D printing to further improve zirconia’s properties is also explored.