The distribution of Ni2+ ions in NiO-doped 10YSZ powder is examined with Superconducting Quantum Interference Device magnetometry, a technique that is able to distinguish between randomly distributed Ni2+ ions in solid solution and ordered Ni2+ ions within NiO with high precision. Very high purity powders containing 0.01, 0.1, 0.5, and 1.0 mol% NiO in 10YSZ (all levels below the solid solubility limit of NiO in 10YSZ) were made from acetate precursors and a modified EDTA (ethylenediaminetetraacetic acid)-citrate synthesis method. The powders were calcined in air at either 873 or 1273 K. The 873 K calcination leads to single phase YSZ particles about 10 nm in diameter, and almost all of the NiO dopant exists in complete solid solution. The 1273 K calcination leads to a larger YSZ particle size (55–95 nm), and also to the formation and/or growth of NiO particles, the amount of which depends on the length of time of calcination. Upon sintering the powders in air (1773 K, 1 h), the NiO dissolves back into 10YSZ. The results demonstrate that particle growth during calcination leads to the exsolution of Ni2+ ions to form NiO. This has important implications for the synthesis of NiO-doped 10YSZ from chemical precursors.