Highly porous zirconia ceramic with nanometric sized grains was prepared from an 8 mol% yttria stabilised zirconia suspension mixed with a commercial latex. The pore volume fraction was varied from 45 to 75% by adjusting the thermal treatment between 750 and 1100 °C. Observations of the microstructure reveal variation in pore shape and size. Mean grain sizes are less than 70 nm. Mercury porosimetry measurements reveal a bimodal pore size distribution. Thermal diffusivity measurements were made with the laser flash technique in order to determine the thermal conductivity at room temperature. The thermal conductivity approaches a lower limit of 0.1 W m−1 K−1. Experimental results were shown to agree closely with predictions made with Landauer's effective medium expression for a two-phase system. The agreement was improved even further by taking into account the interfacial thermal resistance of the grain boundaries and the pore size distribution.