Yttria-stabilized zirconia ceramics is a high-performance material with excellent biocompatibility and mechanical properties, which suggest its suitability for posterior fixed partial dentures. The hypothesis under examination is that the strength and reliability of Y-TZP zirconia ceramics are affected by the inner surface grinding of crowns, and vary with the grinding parameter. Flexural strength, surface roughness, and fracture toughness were determined on samples machined by face and peripheral grinding with varied feed velocities and cutting depths. Results have been compared with those on lapped samples. Analysis of variance and Weibull parameter were used for statistical analysis. It was found that inner surface grinding significantly reduces the strength and reliability of Y-TZP zirconia compared with the lapped control sample. Co-analysis of flexural strength, Weibull parameter, and fracture toughness showed counteracting effects of surface compressive stress and grinding-introduced surface flaws. In conclusion, grinding of Y-TZP needs to be optimized to achieve the CAD/CAM manufacture of all-ceramic restorations with improved strength and reliability.