In this study, mechanical properties of bioactive glass (BAG) synthetic bone graft substitute was improved by containing ZrO2 (ZrO2 -BAG), while maintaining advantageous biological properties of BAG such as osteoinductive and osteoconductive properties. The ZrO2 -BAG was produced by adding ZrO2 in the following proportions to replace Na2 O in 45S5 BAG: 1% (Zr1-BAG), 3% (Zr3-BAG), 6% (Zr6-BAG), and 12% (Zr12-BAG). Properties including XRD, XPS, SEM, DSC, fracture toughness, and Vickers microhardness were evaluated. To assess the biological properties, Ca/P apatite formation, ion release, degradation rate, cell proliferation, ALP activity (ALP), and alizarin red S staining assay (ARS) were evaluated. Also, expression of osteogenic differentiation markers, Osteopontin (OPN), confirmed by immunofluorescence staining. Finally, an in vivo test was carried out to by implanting ZrO2 -BAG into the subcutaneous tissue of rats. The results of each test were statistically analyzed with one-way ANOVA followed by Tukey's post hoc statistical test. Amorphous ZrO2 -BAG was successfully produced with increased mechanical properties as the ZrO2 content was increased. Additionally, ZrO2 -BAG exhibited a slower ion release and degradation rate compare to BAG without ZrO2 . Bioactivity of ZrO2 -BAG was confirmed with apatite layer formed on the surface, significantly higher proliferation rate and significantly enhanced ALP and the degree of ARS of the cells compare to respective controls. The tissue reactions observed in the in vivo study showed neo-formed vessels after implantation of ZrO2 -BAG.