Diphenylmethane and its derivatives are synthesized in excellent yields at 80ºC over ecofriendly catalyst Fe2O3/ZrO2 by benzylation of aromatic compounds with benzyl chloride in short duration. Wet impregnation method was adopted to synthesize the catalyst Fe2O3/ ZrO2 and characterized by the techniques like XRD, FTIR, SEM and UV–Vis diffused reflectance spectra. XRD and IR results indicate the presence of mixture of monoclinic and tetragonal phases in pure zirconia whereas only tetragonal phase is observed in Fe2O3/ZrO2 catalyst. Higher catalytic activity of the catalyst Fe2O3/ZrO2 can be correlated to presence of tetragonal phase, higher surface acidity and redox potential. The catalyst can be easily separated from the reaction mixture, recycled and reused.