Abstract We report a size effect on the Raman spectra of and the phase transition in PbZr 0.2Ti 0.8O 3 nanocrystalline powders. The samples were synthesized by the stearic acid gel method. The average grain sizes and crystal structures were determined by X-ray diffraction. The Raman spectra of PbZr 0.2Ti 0.8O 3 nanocrystals have been measured under different temperatures and hydrostatic pressures. The results show that the phase transition temperature T c shifts to a lower temperature with decreasing grain size. The possibility that the additional band occurring in the low frequency Raman spectra might be due to zone boundary transverse acoustical phonons which couple to the q ≈ 0 soft E (transverse optical) mode is confirmed. The Raman spectra, as a function of pressure, reveal that the phase transition may be connected with a diffuse phase transition.