Monolithic ZrO 2-8mol% YO 1.5 (YSZ) with t' tetragonal phase was found to have high indentation fracture toughness of ~91Jm -2. The effect of transformation of t' phase by cubic zirconia (c) precipitation on fracture toughness was studied. Fracture toughness decreased rapidly at the onset of precipitation, by a factor of ~3 at 1150°C after 12h and ~2.6 at 1250°C after 24h. Ferroelasticity is the toughening mechanism at 1150°C and up to 96h at 1250°C. Ferroelastic toughening was analyzed in terms of tetragonality of the major phase as well as microstructural changes such as coarsening, increasing cubic phase fraction and residual stresses. Transformation toughening was observed after 192h at 1250°C, with an increase in toughness by a factor of ~2.5. The results show that the toughness of initially t' YSZ thermal barrier coatings would evolve during service due to phase transformations. The toughening mechanism may change from ferroelasticity to transformation toughening with TBC aging. © 2012 Elsevier B.V.