A potential material for dental restorations and bone replacements is calcium phosphate (CaP)-based ceramic material. Nevertheless, its limited ability to withstand thermal processing and weak mechanical strength prevents it from being used in hard tissue engineering. Hydroxyapatite has been extensively used as a CaP-based biomaterial in prosthetic applications. On the other hand, zirconia is an inorganic material that combines outstanding mechanical capabilities with bioinert characteristics. In the present investigation, we demonstrated the reinforcement of zirconia in biomimetic hydroxyapatite (HAp) using a specially designed stir-type hydrothermal reactor to improve the biocompatibility and mechanical stability of bare hydroxyapatite. X-ray diffraction (XRD) analysis showed distinct peak shifts around 31 degrees and 60 degrees, which confirmed the formation of a nanocrystalline HAp-Zirconia composite without any intermediate phases. The size of the synthesized nanocomposite was found to be 30 nm using TEM. Further, the d-spacing value calculated from high-resolution transmission electron microscope (HRTEM) images corresponded to the distinct planes of the HAp (211) and zirconia (311) phases, respectively, in the composite powder. The in vitro cytotoxicity study revealed excellent biocompatibility with MG-63 human osteoblasts. Hence, the zirconia reinforced hydroxyapatite (HZ1) prepared in the present work could be utilized as a successful approach in a variety of hard tissue engineering applications.