One of the most important units in the production of zirconiumis the chlorination reaction of zirconia in the presence of carbon in a fluidized bed reactor. An improved version of a pilot fluidized bed reactor with the production capacity of 10 kg per day was designed and built. In order to optimize the operating conditions of the reactor, the fluidized bed zirconia carbochlorination reactor was modeled via a two-phase hydrodynamic model. The model was developed according to the hypothesis of plug (P) for the bubble and mixed (M) for the dense phase. The obtained experimental data of pilot scale reactor was utilized for modeling validation. Investigation of fluidized bed operating conditions with the validated model was accomplished and the results indicated that higher reactor temperature, smaller zirconia size, and higher inlet gas velocity and concentration enhanced chlorination rate.