Zirconium (IV) butoxide was pyrolysed at varied temperatures in air ranging from 900 - 1400 °C to produce nano- and ultrafine-sized powder particles of white zirconia. The pyrolysed powder particles were predominantly monoclinic and the crystallite size varied from 30 nm - 400 nm as determined from X-ray diffraction and electron microscopy. To control the defect chemistry, the precursor was also pyrolyzed in a reduced atmosphere (5% H2 + Ar) at 900 °C, eventually resulting in black zirconia. The stabilization of tetragonal crystal structure and observed color change from white to black in samples pyrolyzed under reduced atmosphere was attributed to the creation of oxygen vacancies and disorder which were confirmed by various spectroscopic techniques. The ZrO2 (black and white) produced delineated the influence of crystal structure and oxygen vacancies on the photocatalytic performance using methylene blue dye. Furthermore, zirconia synthesized at lower temperatures (600 and 800 °C) in air confirmed the detrimental role of metastable tetragonal crystal structure on the degradation behavior of methylene blue dye. High photocatalytic degradation rate for white zirconia was attributed to the presence of increased density of nano-sized pores and defect states. Interestingly, black zirconia obtained from reduced atmosphere exemplified relatively limited activity albeit presence of oxygen vacancies. This negative effect was attributed to the presence of tetragonal phase and possibly, the insufficient creation of new energy states near valance and conduction band towards Fermi energy level. The low recombination rate of electron-hole pairs in white zirconia in contrast to black zirconia was confirmed by PL measurements.