A single step, rapid (<1min), microwave driven, solution combustion technique is used to obtain luminescent, cubic ZrO2: Eu+3nanophosphors. The high temperature cubic ZrO2 phase is obtained directly using L-serine amino acid as the fuel. The phase is stable, and shows no transformation on calcination (upto 800°C, 2h). The method presented here results in a final product with low concentrations of unintentional impurities (carbon<0.65 at%, N<0.09 at%, and no S); desirable for a luminescence host. Kisielowski’s model based analysis suggests that Eu3+ is present in the lattice in concentrations as high as 2.5 mol%. The effect of calcination temperature (400, 600 and 800°C) on optical and luminescent properties is investigated. Interestingly calcination of this material results in an increase in optical band gap (ΔEg=0.12eV), strongly suggesting defect-induced Moss-Burstein (M-B) effect in as-synthesized sample. It is noteworthy that, this is the first report demonstrating defect induced M-B effect in microwave derived ZrO2. Using photoluminescence spectra based asymmetric ratio based analysis, it is observed that the increase in symmetry around the Eu3+ ion is concomitant with the increase in overall point-defect density (which in turn results in M-B effect). There is an increase in PL intensity with calcination, which is attributed to increased crystallinity.