Theearly stages of growth of high quality YBa2Cu3O7− (YBCO) filmsgrown on (001) Y-ZrO2 (YSZ) substrates by pulsed laser depositionhave been studied using a combination of atomic force microscopyand transmission electron microscopy. A one unit cell thick YBCOlayer and relatively large CuO particles formed in the initialstages. Additional YBCO grew on top of the first layerin the form of one or a few unit cellhigh c-axis oriented islands about 30 nm in diameter. Therounded islands subsequently coalesced into faceted domains. Elongated Y2BaCuO5 particlesnucleated after the first layer of YBCO. A highly texturedBaZrO3 layer formed between the YSZ and the YBCO witha cube-on-cube dominant orientation relationship with respect to the YBCOfilm. Journal of Applied Physics is copyrighted by The American Institute of Physics.