ZrO2‐based ceramics are widely used in biomedical applications due to its color, biocompatibility, and excellent mechanical properties. However, low‐temperature degradation (LTD) introduces a potential risk for long‐term reliability of these materials. The development of innovative nondestructive techniques, which can explore LTD in zirconia‐derived compounds, is strongly required. Yttria stabilized zirconia, 3Y‐TZP, is one of the well‐developed ZrO2‐based ceramics with improved resistance to LTD for dental crown and implant applications. Here, 3Y‐TZP ceramic powders were pressed and sintered to study the LTD phenomenon by phase transition behavior. The LTD‐driven tetragonal‐to‐monoclinic phase transition was confirmed by XRD. XPS analysis demonstrated that induced LTD reduced the oxygen vacancies which supports these findings. It is proved that after the degradation, the 3Y‐TZP ceramics show the decreased dielectric permittivity at terahertz frequencies due to the crystallographic phase transformation. Terahertz nondestructive probe is a promising method to investigate LTD in zirconia ceramics.