Abstract Highly pure and well‐dispersed yttria nanocrystalline powders were synthesized with a modified coprecipitation method that uses mixed ammonium hydroxide‐carbonate solution as the precipitant and poly acrylic acid (PAA) as the dispersant. Comparing with the yttria powders synthesized using the same route but without PAA dispersant, the PAA‐assisted powders exhibit lower level of agglomeration and better sinterability. Sintering trajectories of the powders with and without PAA dispersant were investigated. Y 2 O 3 ceramics sintered with the PAA‐assisted powders exhibited smaller grain size, homogeneous microstructure, and higher in‐line optical transmittance. The result suggests that the polymer‐assisted coprecipitation could be used to synthesize yttria nanopowders for fabricating high optical quality transparent ceramics.