Effect of annealing temperature on luminescence of Eu3+ ions was studied in nanocrystal zirconia prepared by co-precipitation. The results reveal that the crystal phase and shape of the samples the tetragonal crystal phase is stable and the content of O2- ions change with annealing temperature increasing. The emission spectra show strong emission at 595 nm and 604 nm. Under UV (394 nm) irradiation the 604 nm emission intensity change from sample to sample. It is related with the difference in surface defects in the surface of the nanocrystalline samples doped with different Eu3+ ion concentrations. In addition, the annealing temperature affects the charge transfer of the samples. The result reveals the change of CTB is also relative to the surface defects of the samples.