Ceramic materials of thermal barrier coatings (TBCs) inevitably undergo sintering during long-term service, which can deteriorate the performance at high temperatures. Sintering behavior is commonly a key index for evaluating the application potential of TBCs. Here, we conducted the thermal exposure experiments on the novel NdYbZr2O7 coating at 1300 °C. Results show that multipoint connection is the dominant sintering mechanism. Based on the porosity evolution, the whole sintering process is divided into two stages: 1) stage I characterized by the healing of most equal-width intrasplat cracks and narrow tip of wedge-like intersplat cracks, and 2) stage II characterized by the healing of residual wide part of intersplat cracks. As the thermal exposure duration increases, thermal conductivity of coating at 800 °C increases from ~0.72 W⋅m−1⋅K−1 to ~1.19 W⋅m−1⋅K−1. The linear correlation between the porosity and thermal conductivity indicates that porosity is the critical factor controlling the thermal conductivity of the coating. In comparison with other coatings such as YSZ and SrAl12O19 reported in previous literature, NdYbZr2O7 coating exhibits better thermal insulation and higher sintering resistance. In addition, Young's modulus of coating first rapidly increases and then slowly with time, closely associated with the evolution of porosity.