Zirconium diboride (ZrB2) was synthesised by a solution-based technique using zirconyl chloride (ZrOCl2.8H2O, ZOO), boric acid (H3BO3, BA) and gum karaya (GK) as the sources of zirconium, boron and carbon, respectively. The initial formation temperature of ZrB2 was 1200 °C and complete conversion was achieved by 1400 °C. Preceramic precursors and as-synthesized ZrB2 powders were characterized by XRD, TG-DTA, SEM, TEM, EDX and compared with commercial ZrB2 powder made by carbothermic reduction. FT-IR of as-synthesized dried preceramic precursor revealed the formation of Zr–O–C and Zr–O–B whereas SEM showed agglomerated spherical particles with mean diameter of <1 µm. Commercial ZrB2 and as-synthesized fine ZrB2 powder were spark plasma sintered (SPS) at 1900 °C for 10 min. Addition of 10 wt% of synthesized fine powder improved the densification from 87 to 93%. A significant cost benefit arises for the utilization of cheap synthesized fine powder as an additive for the densification of the more expensive commercial powder.