Zirconia particles are generated into a nitrile rubber (NBR) matrix via a solution sol–gel method in a controlled manner. Formation of zirconia particles from their precursor (zirconium(IV) propoxide) occurs under optimized reaction conditions. As a result, the nanoparticles are embedded and well dispersed in the NBR matrix that results in a remarkable improvement in mechanical and thermal properties of the composite. Such reinforcement is not realized when the composites are prepared following the conventional technique of filler loading by physical mixing, although the filler content remains the same. Use of a surface active coupling agent TESPT (bis-(3-triethoxysilylpropyl) tetrasulfide) in the reactive sol–gel system is found to further boost the mechanical performance of the composites. In order to ensure the practical application of the developed composites, a series of studies have been performed that consist of dynamic performance, swelling, thermal degradation, and resistance to oil, ozone, and abrasion. Analysis of the results reveals that in situ zirconia could be an excellent filler for the NBR composites to withstand in a harsh and adverse environment.