Zirconium hydroxide gel has been prepared by a novel aqueous gelation process by the controlled hydrolysis of zirconium oxychloride in the presence of sodium acetate. The gel thus formed has been subjected to thermal analysis: TG, DTG, and DSC. Thermal analysis shows that the gel is continuously dehydrated in the temperature range between room temperature and 500 °C. The total mass loss relative to the initial mass is about 44.1%. Thermal analysis shows that the decomposition takes place in three stages. The gel contains absorbed and coordinated water. In the second stage of dehydration, dehydration of the Zr(OH)4 gel also takes place along with the removal of the coordinated water. The DSC analysis coupled with TG and structural information, indicate that the exothermic processes between 349 and 460 °C can be attributed to the nucleation process of the formation of tetragonal zirconia, with phase transformation at 460 °C.