Impact of residual stresses on the thermal shock resistance of alumina–zirconia multi-layer ceramics is investigated within the framework of finite fracture mechanics, using astress-energy criterion. The critical temperature difference (ΔTc) for crack formation is strongly dependent on the magnitude of residual stress and the material’s strength. The predicted minimal spacing between cracks, critical time for crack initiation, and initial depth of the induced cracks are compared and discussed for different designs. An increase of up to ∼40 % in ΔTc is predicted for multi-material ceramics with athin alumina surface layer with compressive stresses, compared to bulk reference alumina.