The irradiation response of yttria-stabilized zirconia, having different grain sizes, subjected to 900 keV iodine ions at room temperature and 1000 K is reported. GIXRD and Raman spectroscopy indicate superior radiation tolerance of the fine-grained samples when compared to their coarse-grained counterparts which is attributed to the abundance of grain boundaries at relatively shorter distances. A reduction in the residual strain is observed in the samples irradiated at 1000 K. This is attributed to the clustering of the irradiation induced point defects thereby resulting in a decrease in their density, but with a corresponding increase in the extended defects density.