The intrinsic or exciton luminescence and intrinsic defects related luminescence is known in a number of oxides. Both kinds of luminescence were observed in the ZrO₂ nanocrystals. The large contribution in the nanocrystal luminescence could be from centres (defects) located close to the surface. The luminescence centre surrounding in some cases could be determined from the change of electron transition probability. The probabilities of transitions ⁵D₀ - ⁷F₁ and ⁵D₀ – ⁷F₂ of Eu³⁺ strongly depend on the symmetry of ion position and it is demonstrated the two different positions of this ion in ZrO₂ nanocrystals is possible. The introducing of defects in oxygen sub-lattice strongly changes undoped and doped ZrO₂ nanocrystals luminescence. The defects led to the significant difference between inter-centre and recombination luminescence. It was shown the differences arises due to suppressed energy/charge transfer from host to the luminescence centres. The main defect introduced is oxygen vacancy, having three possible charge states thus three different luminescence centres might be. Really the larger number of slightly different luminescence centres were detected. Possible origin and models of these centres will be discussed. The luminescence dependence on defects in ZrO₂ nanocrystal oxygen sub-lattice indicated the material is promising for luminescent oxygen sensor development. The oxygen exchange between nanocrystal and surrounding gasses via nanocrystal surface occur. The advanced material for new generation of luminescent oxygen sensors could have developed surface for efficient oxygen exchange and transparency high enough for luminescent light output. It is supposed specific ZrO₂ nanoceramic having small grain sizes and a net of nanopores through all the material will be appropriate.