High‐quality YBa2Cu3O7−δ films grown on (001) single‐crystal Y‐ZrO2 substrates by pulsed laser deposition have been studied as a function of substrate temperature using transmission electron microscopy. A transition from epitaxial films to c‐axis oriented polycrystalline films was observed at 740 °C. An intermediate, polycrystalline, BaZrO3 layer was formed from a reaction between the film and the substrate. A dominant orientation relationship of [001]YBCO//[001]int. layer//[001]YSZ and [110]YBCO//[110]int. layer//[100]YSZ was observed. The formation of grain boundaries in the films resulted in an increased microwave surface resistance and a decreased critical‐current density. The superconducting transition temperature remained fairly constant at about 90 K.

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