Water recycling is a convenient way to get around the water shortage and wastewater analysis. The water can be reused for domestic purposes by eliminating organic pollutants through a photocatalytic process. For this aim, the sol-gel dip coating process synthesized ZrO2 nanostructured thin films with tunable structural, morphological, and optical properties and photocatalytic activities. Zr sources (acetate, nitrate, and chloride), annealing temperature (TA), and thickness (d)-dependent structural, morphological, optical, and photocatalytic performances of the ZrO2 films were scrutinized by x-ray diffraction (XRD), scanning electron microscopy (SEM), electron dispersive x-ray spectroscopy (EDS), mapping technique, and UV–Vis spectroscopy. The XRD, SEM, EDS, and mapping analyses confirmed the formation of nanostructured ZrO2 thin film. The results revealed that ZrO2 film had a tetragonal phase with various crystallite sizes and different surface morphologies as the Zr sources, TA, and d varied. There were significant variations in the optical absorbance, band gap, refractive index, and absorption coefficient based on Zr sources, TA, and d. Among all ZrO2 films, the film sample synthesized by the Zr-acetate source annealed at TA of 500 °C and with d of 940 nm was found to be the most effective film in terms of optical and crystalline quality as well as photocatalytic performance (94% efficiency in 150 min) for the degradation of methylene blue dye. The enhanced light utilization capability suppressed charge recombination, surface morphology, grain size, defect concentration, and optical band gap values of the nanostructured zirconia thin films are the key factors corresponding to enhanced photocatalytic performance.