Abstract The maximum operating temperature of conventional thermal barrier coatings based on yttria-stabilized zirconia is ultimately limited by de-stabilization of the “non-transformable” t phase, rendering it susceptible to the monoclinic transformation upon cooling. Investigations into alternative thermal barrier oxide compositions suggest that Yb offers superior t stability compared with Y, Sc and larger rare earth cations at the same concentration. The present study sheds light on this behavior by comparing the microstructure evolution of specimens with 7.6 and 11.4 % MO1.5 (M = Y or Yb) heat treated at 1450 °C for times up to 512 h. X-ray diffractometry and transmission electron microscopy revealed that the onset of partitioning occurs at short times but then the compositions of the phases evolve slowly over time until sufficient stabilizer is depleted from the t phase to render it transformable. Substitution of Yb for Y delays the onset of monoclinic formation. Differences in the transformation behavior of the Y and Yb rich phases on cooling provide new insight and suggest refinements to the current thermodynamic models for the binary ZrO2 – MO1.5 systems are needed.