Muon spin relaxation has been measured in Sr(Cu1-xZnx)2O3. The results for low Zn concentration x</=0.6% are consistent with freezing of dilute moments, with one Cu spin for each Zn, having approximately 0.5&mgr;(B) frozen moment. A sharp increase of the relaxation rate at T-->0 occurred with increasing x around x approximately 0.8%, accompanied by a change of line shape to that expected in a concentrated magnetic environment. Analyses of the results for x>/=0.8% suggest that the majority of Cu moments participate in spin freezing, yet with a significantly reduced and spatially inhomogeneous moment size having a 1D correlation length xi approximately 6 lattice units, or a 2D correlation area involving approximately 19 Cu spins.