Whether present as a manufactured stabilised ceramic, or as an oxide layer on zirconium alloys, mechanical degradation in zirconia is influenced by the tetragonal to monoclinic phase transformation.Peridynamic theory was implemented within the Abaqus finite element framework to understand how the tetragonal to monoclinic phase transformation can itself cause fracture in zirconia. In 2D these simulations represent a single grain, transforming via an isometric dilational expansion, surrounded by a homogenous monoclinic oxide. The effect of transformation time, applied bi-axial pressure, and the fracture strain were assessed using the change in strain energy and the amount of damage in the oxide surrounding the transformed grain. Reducing the applied compressive stress or applying a tensile stress reduces the transformation strain energy. The introduction of a fracture strain leads to damage in the surrounding oxide region largely in the form of cracks, and reduces the transformation strain energy further by reducing the constraint on the transforming grain. The extent of the fracture, and reduction in constraint on the transformed grain, is more significant with the application of a biaxial tensile pressure.