Zirconia (ZrO2) nanostructures doped with Cd ratios were synthesized using a sol-gel approach and analysed using various techniques, including X-ray diffraction (XRD), differential scanning calorimetry (DSC), Fourier transform infrared spectroscopy (FT-IR), scanning electron microscopy (SEM), ultraviolet-visible spectroscopy (UV-Vis), and energy dispersive X-ray (EDX) analyses. XRD patterns for pure ZrO2 samples annealed at 400 °C-500 °C had a tetragonal phase, while for ZrO2 doped with different cadmium ratios, the tetragonal phase appears at 200 °C or above, up to 700 °C. DSC measurements show a tetragonal phase at 450 °C for pure ZrO2 and 500 °C for Cd-doped ZrO2. Furthermore, the peak appeared at 800 °C in the pure sample, which, related to the monoclinic phase, exhibits a clear shift towards higher temperatures in Cd-doped zirconia samples, demonstrating stabilization. The FT-IR spectra confirmed the presence of cadmium ions in the zirconia host lattice and the formation of nano-zirconia in the tetragonal phase. EDX analysis verified the absence of any other elements except Zr, Cd, and O. The optical analysis demonstrated a reduction in the band gap for Cd-doped zirconia compared to pure zirconia. SEM images showed that agglomeration and neck formation occurred with increasing Cd ratios in the zirconia lattice.