Ytterbium-doped barium zirconate (BZYb) is one of the promising electrolyte materials of protonic ceramic fuel cells (PCFCs), because of its high proton (H+) conductivity as well as good stability under CO2 containing atmosphere. The issue must be solved of this material is requisite of high temperature treatment for densification applicable for PCFC electrolyte. The development of lower temperature sintering technology of this material is highly needed from the viewpoint of better performance and lower production cost. Although lower temperature sintering of BaZrO3-based oxides has been achieved by the addition of oxides including Li2O, NiO, CuO, ZnO etc as sintering additives, their addition reduces H+ conductivity, significantly.  The growth of nano-sized raw powder is another way of lower temperature densification, since nanoparticles has higher surface energy, which is the driving force of sintering. In the present study, we propose a colloidal approach for the growth of BaZr0.8Yb0.2O2.9(BZYb20). This approach consists of two steps, hydrothermal growth of aqueous dispersed Zr0.8Yb0.2O1.9 (YbSZ) nanocrystals, and prefabrication of BaCO3-YbSZ nanocomposite precursor through artificially induced heterogeneous nucleation, followed by heat treatment for solid state reaction. Green compacts were fabricated through a powder compaction by die-pressing at 50 MPa, followed by cold isostatic pressing at 200 MPa. Sintered pellet was obtained by heat treatment of the green compact between 1400 and 1600 ºC for 24 h. Single phase BZYb nanoparticles with the crystalline size of approximately 20 nm were successfully grown after heat treatment of the precursor at 1100 ºC. The fully dense BZYb20 pellet was obtained after sintering at1500 ºC. The temperature is lower about 200 ºC compared to conventional BZYb20 powder. The successful lower temperature sintering is attributable to the nano-sized BZYb20 power.