Yttria‐stabilized zirconia (YSZ) thin films were deposited by reactive magnetron sputter deposition from a composite Zr–Y target in Ar–O2mixtures. Hysteresis was observed as a function of oxygen flow rate f. For a discharge current of 0.4 A and a total pressurePof 5 mTorr, for example, the target oxidized at f>2.3 ml/min, with the reverse transition from an oxidized to a metallic target surface occurring at 1.95 ml/min. The deposition rate was 2.7 μm/h in the metallic mode and 0.1 μm/h in the oxide mode. Fully oxidized (Y2O3)0.1(ZrO2)0.9was obtained forf>2.0 ml/min, even in the metallic mode. While films deposited withP=3–20 mTorr were continuous, forP>20 mTorr crazing was apparent as expected for a ceramic film in a tensile stress state. ForP<3 mTorr, the films delaminated due to excessive compressive stress. X‐ray diffraction and electron microscopy results showed that the films were polycrystalline cubic YSZ with a columnar structure and an average grain diameter of 15 nm. Fully dense films were obtained at a deposition temperature of 350 °C. Temperature‐dependent impedance spectroscopy analysis of YSZ films with Ag electrodes showed that the oxygen ion conductivity was as expected for YSZ.