Industrially relevant nanopowder was synthesised by microwave hydrothermal synthesis to obtain wellcontrolled composition (ZrO 2 -AlO(OH) system) which was found to determine a number of physical and thermal characteristics. This study reports variation of particle size, density, specific surface area (SSA BET ), as well as thermal behaviour of nanopowder mixtures of ZrO 2 -AlO(OH) in the whole range of compositions. It was found that the onset temperature (T on ) of physically and chemically bounded water desorption depends on the Al 3? /or AlO(OH) content. The lower content of Al 3? in the ZrO 2 -AlO(OH) system, the higher T on of physically bound water desorption. There are three distinct temperature regions for water decomposition for nanomaterials investigated in air (at approximately 50, 250 and 450°C). These temperature ranges depend on particle size and chemical composition of ZrO 2 -AlO(OH) nanopowders. Materials were divided into three groups characterised by different properties: (1) ZrO 2 with 2-12% of Al 3? , where particle sizes are from 4 to 8 nm, (2) ZrO 2 with 30-67% of AlO(OH), where particle sizes are from 10 to 13 nm, and (3) ZrO 2 with 80-99% of AlO(OH), where particle sizes are from 13 to 23 nm. AlO(OH) content determines thermal and physico-chemical properties of synthesised ZrO 2 -AlO(OH) nanopowders.