Zr(N)O coatings being synthesized by cathodic arc evaporation (P3e™ technology) show that cubic zirconia, ZrO2, can be formed at low substrate temperatures of 550 °C using nitrogen-oxygen reactive gas mixtures during deposition. The structural properties of the coatings obtained for different nitrogen-oxygen ratios have been investigated by X-Ray Diffraction (XRD) techniques. The composition of the layers was studied by RBS and ERDA and the layers morphology by cross sectional SEM. For low oxygen flows, the cubic ZrN and ZrO phase were formed while increased oxygen flow results in a transition starting from the orthorhombic to the cubic and to the monoclinic ZrO2 phase. The phase stability of the cubic ZrO2 phase has been investigated by in situ high temperatures XRD studies in air and reveals a multi step phase transformation starting at about 550 °C with a change to the tetragonal ZrO2 phase and the further transition to the monoclinic phase at higher temperatures.