The martensitic transformation from the rhombohedral to the orthorhombic phase in a lead zirconate titanate (Zr/Ti = 95/5) ceramic has been studied under uniaxial compressive stress using neutron diffraction. Ferroelastic domain switching in the rhombohedral phase was observed by monitoring the pseudo-cubic {111}p diffraction peaks, whereas the development of the orthorhombic phase texture was revealed most clearly by examining the changes in the {200}p reflections under stress. Rhombohedral grains having the ⟨100⟩ p direction along the compression axis transformed most efficiently, by the development of the c-axis of the orthorhombic phase along this direction. The transformation strain along this direction was most dominant and determined as −1.1 × 10−2, whereas the lateral strains were measured as 1.0 × 10−3. In contrast to the case of hydrostatic compression, under uniaxial stress the transformation proceeded progressively as the applied compressive stress increased beyond a level of 200 MPa, up to a maximum orthorhombic phase fraction of 70% at a stress of 400 MPa. Pronounced hysteresis was observed upon unloading, indicating that the frictional stress required to move a rhombohedral/orthorhombic interface is approximately 150 MPa. By monitoring the lattice strain, it was found that the total stress along ⟨100⟩ p remained approximately constant during the progress of the transformation. This is caused by an increase in the residual tensile stress within {100}p-oriented grains owing to the difference between their transformation strain and that of the surroundings. The above tensile stress is balanced by compressive residual stresses in the surrounding grains.