Sulfate grafted iron stabilized zirconia nanoparticles (SO 4 2− /xFe−Zr−O) are prepared by a coprecipitation method followed by sulfate ion grafting. The SO 4 2− /xFe−Zr−O materials have been characterized using XRD, UV−vis, FTIR, Raman, SEM, and TEM techniques. XRD study indicated incorporation of iron ions (up to 20 mol %) into the zirconia lattice, resulting in the formation of a substitutional solid solution. The vibrational features corresponding to the SO and S−O stretching of anchored sulfate species are observed in the FTIR study. The Raman study indicated the presence of nanosize hematite and tetragonal zirconia phase in the composite oxide. The presence of iron oxide in the zirconia lattice improves the sulfate retention capacity of the host zirconia. The SO 4 2− /xFe−Zr−O materials are found to be efficient catalysts for the synthesis of structurally diverse xanthenediones by one-pot condensation of dimedone with aryl aldehydes under solvent-free conditions and microwave irradiation.