By using X‐ray diffraction lattice parameter measurements and Raman spectroscopy studies, both the solid solubility limit of titania in yttria tetragonal zirconia polycrystalline solid solutions and the tetragonal solid solution field in the system have been established. Valence state, site symmetry, and changes in local structures of Ti ions in Y‐TZP with 5 and 10 mol % are studied for the first time using EXAFS (extended X‐ray absorption fine structure), XANES (X‐ray absorption near edge structure), and X‐ray photoelectron spectroscopy. The total electrical conductivity in air of the tetragonal solid solution decreases with increasing titania content. XANES results show that as the dissolves into the tetragonal zirconia Y‐TZP matrix, a displacement of ions from the center of symmetry seem to take place which leads to a nonrandom substitution of ions on lattice sites. Ti‐O bond distances derived from EXAFS results indicate that ion can be in a square‐pyramidal arrangement, i.e., fivefold oxygen‐coordinated. As a consequence, two kind of cation‐oxygen vacancy associations ( and ) with different diffusion dynamics are created. This results in a decrease of the global concentration of moving oxygen vacancies and therefore, a decrease of ionic conductivity. Electronic conductivity, n‐type, only appeared at oxygen partial pressure lower than atm and above 800°C in Y‐TZP containing 10 mol % titania. Such an n‐type electronic conduction was attributed to a hopping of electrons between and cations by a small polaron hopping mechanism. © 1999 The Electrochemical Society. All rights reserved.