It is well known that the stress induced martensitic transformation is responsible for the high strength of partially stabilized zirconia (PSZ). In the present study, conventionally sintered (CS) and hot-pressed (HP) commercial PSZ compacts with 2.5 mol% Y₂O₃ were used as original materials. After annealed at various temperatures, transformation behaviors during cyclic annealing were investigated by dilatometory. In addition, bending test was carried out for HP specimens subjected to cyclic annealing. The results are as follows: (1) The dominant constituent phases in as-received and as-annealed specimens were tetragonal and cubic, except a few cases. (2) The tetragonal phase (t-ZrO₂) in as-received PSZ was stable up to 1573 K. But in the specimens pre-annealed at higher temperatures, the retained t-ZrO₂ transformed to the monoclinic phase (m-ZrO₂) at about 500 K, and then transformation from monoclinic to tetragonal (m-t) took place at about 850 K on the first heating. This t-ZrO₂ easily transformed to m-ZrO₂ at about 700 K on the subsequent cooling. (3) The stability of t-ZrO₂ in as-annealed specimens is influenced by the segregation of Y in the original state. (4) The mean value of transverse rupture strength of HP–PSZ was decreased by thermal cycles of 100 times up to 1553 K.