Lead zirconate titanate (PZT) is one of the most widely studied piezoelectric materials, mainly because of its 'mysterious' relationship between the so-called morphotropic phase boundary (MPB) and its strong piezoelectric coupling factor. Using results from a pair distribution function analysis, this paper examines how the complex local structure in PZT affects the long-range average structure across the MPB. A monoclinic M C type structure is discovered in PZT. A first-order transformation between the monoclinic M A and M C components in both the average and local structures explains the sudden change in piezoelectric effect around these compositions. The role of polarization rotation in the enhancement of the piezoelectric properties is discussed with respect to the composition of PZT. The structure-property relationship that is revealed by this study explains the unique properties of PZT, and may be applicable in the design of new MPB-type functional materials.