Lithium is known to accelerate the corrosion of zirconium alloys in light water reactor conditions. Identifying the mechanism by which this occurs will allow alloying additions and alternative coolant chemistries to be proposed with the aim of improved performance. Accommodation mechanisms for Li in bulk ZrO2 were investigated using density functional theory (DFT). Defects including oxygen and zirconium vacancies along with lithium, zirconium and oxygen interstitials and several small clusters were modelled. Predicted formation energies were used to construct Brouwer diagrams. These show how competing defect species concentrations change across the monoclinic and tetragonal oxide layers. The solubility of Li into ZrO2 was determined to be very low indicating that Li solution into the bulk, under equilibrium conditions, is an unlikely cause for accelerated corrosion.