The use of γ-TiAl alloys at higher temperatures exceeding 700–800 °C is restricted due to their inadequate oxidation resistance. Their durability and high temperature capability can be enhanced by the application of oxidation resistant coatings. The present study examines the cyclic oxidation behavior of a diffusion Al3Ti coated lamellar Ti–45Al–5Nb-0.2B-0.2C (in at.%) γ-TiAl alloy during exposure at 800 and 950 °C in air for 500 h. The effect of oxidation on the coating microstructure and the compression properties at room temperature, 800 and 950 °C are assessed. The coating forms a protective Al2O3-rich oxide scale, which lowers the overall oxidation rate and induces steady parabolic weight gain in the coated alloy; unlike the extensive weight loss occurring in the bare/uncoated alloy during oxidation at higher temperatures. The parabolic oxidation rate constant (Kp) for the coated alloy at 6–7 x 10−7 mg2 cm−4 s−2 is two orders of magnitude lower than that of the bare alloy. Surface embrittlement during oxidation causes deterioration in the compression yield strength of the bare alloy. On the other hand, the coating prevents oxidation-induced surface degradation of the alloy, which manifests in improved compression strength of the oxidized coated alloy as compared to that of the oxidized bare alloy. Though the coating is constituted of the brittle intermetallic Al3Ti phase, the cracks in the coating do not penetrate the substrate and are innocuous to the compression properties of the underlying intermetallic γ-TiAl alloy. The coating is beneficial in providing oxidation resistance and prevents significant oxidation-induced deterioration in compression strength of the alloy during high temperature exposure. Besides, the Al3Ti coating does not induce significant deterioration in the tensile strength of the γ-TiAl alloy.