Hybrid plasma spraying combined with yttrium-aluminum-garnet laser irradiation was studied to obtain optimum zirconia coatings for thermal barrier use. Zirconia coatings of approximately 150 µm thickness were formed on NiCrAlY bond coated steel substrates both by means of conventional plasma spraying and hybrid plasma spraying under a variety of conditions. Post-laser irradiation was also conducted on the plasma as-sprayed coating. The microstructure of each coating was studied and, for some representative coatings, thermal barrier properties were evaluated by hot erosion and hot oxidation tests. With hybrid spraying, performed under optimum conditions, it was found that a microstructure with appropriate partial densification and without connected porosity was formed and that cracks, which are generally produced in the post-laser irradiation treatment, were completely inhibited. In addition, hybrid spraying formed a smooth coating surface. These microstructural changes resulted in improved coating properties with regard to hardness, high temperature erosion resistance, and oxidation resistance.