Zirconium dioxide shows great potential for use in the nuclear power industry. It exhibits high radiation stability (neutron and heavy ions) and can withstand harsh environments. The paper presents a study on the effects of 710 MeV Bi ion irradiation on polycrystalline partially yttria-stabilized zirconia using the combination of experimental techniques - X-ray diffraction, transmission electron microscopy and Raman spectroscopy. It was revealed that bismuth ion induced tracks retain their crystalline structure and their density tends to saturate at ∼1 × 1012 cm−2. As a result of dense ionization stimulated structural modification a t → t'' phase transformation was observed. The radiation stability of t'' phase against swift heavy ion impact was found to be higher compared to the t phase. No amorphization was detected up to Bi ion fluence of 2 × 1013 cm−2.