Thin films of ZrO2-Al2O3 were grown on cubic-Zr(Y)O2 substrates by a liquid precursor route. Phase formation and epitaxy of these films was studied as a function of heat-treatment temperature and time. The following sequence of phases was observed in these thin films: Precursor → t-(Zr,Al)O2 → t-(Zr,Al)O2 + γ-(Al,Zr)2O3 → m-ZrO2 + α-Al2O3 Observations strongly suggest that the epitaxial process initiated before the metastable, single phase t-(Zr, Al)O2 partitioned to t-(Zr, Al)O2 + γ-(Al, Zr)2O3. Observations at 1400 °C show that, after the γ to α transformation, α-Al2O3, grains develop an elongated, prismatic morphology and an epitaxial relation with the underlying and surrounding m-ZrO2. The phase that is chemically and structurally similar to the substrate, in this case t-(Zr,Al)O2, or m-ZrO2, forms an epitaxial layer between the substrate and isolated, prismatic grains of heteroepitaxial α-Al2O3.