A plasma-sprayed 8 wt.% yttria partially stabilized zirconia coating doped with 3 wt.% SiO2 was remelted by laser. The microstructure of the as-sprayed and laser-remelted coatings was characterized by scanning electron microscopy (SEM), electron probe microanalysis (EPMA), transmission electron microscopy (TEM), and x-ray diffraction (XRD). The effect of laser remelting on the hardness, wear resistance, and thermal shock resistance of the coatings was also studied. The laser-remelted coating consists of fine solidification grains without the presence of pores and cracks. The elements are uniformly distributed in the laser-remelted coating. Nontransformable tetragonal (t′) phase is predominant in the laser-remelted coating with a small amount of cubic phase. Laser remelting greatly enhanced the hardness, wear resistance, and thermal shock resistance of the coatings, and should find more applications.