We synthesized pure and Co-doped (6.25%–12.5% at.) ZrO₂ nanopowders in order to study their magnetic properties. We analyzed magnetic behavior as a function of the amount of Co and the oxygenation, which was controlled by low pressure thermal treatments. As prepared pure and Co-doped samples are diamagnetic and paramagnetic respectively. Ferromagnetism can be induced by performing low pressure thermal treatments, which becomes stronger as the dwell time of the thermal treatment is increased. This behavior can be reversed, recovering the initial diamagnetic or paramagnetic behavior, by performing reoxidizing thermal treatments. Also, a cumulative increase can be observed in the saturation of the magnetization with the number of low pressure thermal treatments performed. We believe that this phenomenon indicates that cobalt segregation induced by the thermal treatments is the responsible for the magnetic properties of the ZrO₂-Co system.