Advanced turbine engines require the application of thermal barrier coatings (TBCs) to provide still higher reliability, thermal insulation effect and longer lifetime under harsh operating conditions. TBCs with nanostructure proved to be promising to deliver the desired property and performance. To exploit full potentials of the current widely used yttria-partially-stabilized zirconia (YSZ), nano-sized YSZ powders were developed and used as the ceramic source material. By controlling the deposition processes, novel TBCs with outstanding nanostructure such as nano-sized grains and pores were produced by atmospheric plasma spray (APS) and electron beam physical vapor deposition (EB-PVD), respectively. The incorporated nanostructure in TBCs resulted in substantial increase in thermal barrier effect and their lifetime. The long-term microstructure stability of the nanocoating was also investigated.