Objectives: To evaluate the effect of Fe2O3 on the optical properties of yttria-stabilised tetragonal zirconia (Y-TZP) dental ceramic when added, and to determine the correct content required to mimic the natural dentin. Methods: Disc-shaped Y-TZP specimens (0.50 ± 0.01 mm in thickness) containing various contents of Fe2O3 were fabricated by cold isostatic pressing and pressureless sintering, and then compared with human dentin slices (n = 40) under different moisture conditions. The visible light transmittance and colour parameters were recorded by a computer-controlled spectrocolourimeter. Sintered density and microstructure were investigated with the Archimedes' method and scanning electron microscopy (SEM), respectively. Results: With the reduction of moisture in dentin slices, the direct transmittance dropped from 1.58% to 0.87%. The direct transmittance of coloured zirconia specimens, ranging from 1.22% to 1.40%, covered the range of dentin. With increasing Fe2O3 content, the L* value of the coloured specimens decreased from 88.95 to 84.18, while b* increased from 3.43 to 12.02. The relative densities of all groups were over 99% of the theoretical value. The SEM indicated that zirconia with various amounts of Fe2O3 retained the compact microcrystalline tetragonal structure. Conclusion: Small amounts of colourant additions affected the colour and the transmittance slightly, but had no influence on the sintered density and microstructure. Y-TZP could be improved by the control of colourant additives of Fe2O3 in order to mimic the natural colour of dentin and to obtain a better aesthetical appearance of restorations, especially when the content was around 0.08 wt%. Keywords: colourant, Fe2O3, optical property, translucency, Y-TZP, zirconia