In internal combustion engines, while the decrease in in-cylinder wall temperature increases the amount of energy passing towards the cooling system, it decreases temperature and pressure at the end of compression and accordingly reduces thermal efficiency of the engine. Moreover; combustion chamber elements are exposed to chemical corrosion and deformation as a result of uncompleted combustion in the cylinder. With thermal barrier coating application, the energy lost in cooling system will decrease and exhaust temperatures will increase in 2-stroke engines. Placement of a waste heat recover system with thermoelectric generator into the exhaust system can provide exhaust waste heat recovery and increase thermal efficiency of the engine. There is no study in the literature, which examines waste heavy recovery systems with thermal barrier and thermoelectric generator altogether. In this article, yttria stabilized zirconia coating has been applied by means of plasma spraying method in the combustion chamber of a 2-stroke gasoline engine, and effect of thermal barrier coating application on engine performance and exhaust waste heat recovery system has been examined experimentally. According the results of the experiment, maximum engine power has increased by 6.23%, maximum engine torque has increased by 6.02%, and specific fuel consumption decreased by 5.56%. While the exhaust temperatures have increased by 78.5 °C at maximum by means of thermal barrier coating application; by means of thermal barrier coating application with waste heat recovery system with thermoelectric generator, a higher waste heat recovery has been obtained by 64.8%.