Cubic zirconia with 15 and 20 mol% yttria shows serrated yielding between about 820 ^°C and 1250 ^°C. In the instability range, the strain rate sensitivity of the flow stress is zero. There are similarities of the stress dependence of the strain rate between the stress drops during serrations and stress relaxation tests. The stress relaxation curves exhibit a sharp transition from a minimum relaxation rate to zero rate corresponding to complete blocking of the dislocations. The minimum rates follow an Arrhenius-type relationship which divides the ranges of stable and unstable deformation at the low-temperature border of the instability range. The serrated yielding is interpreted as a strain rate softening instability caused by dynamic strain ageing. This results in a flow stress contribution which increases with increasing temperature, thus leading to a high flows stress in a wide temperature range.