CYSZ (CeO2-Y2O3-ZrO2) coatings were prepared via PS-PVD (plasma spray physical vapor deposition) using untreated YSZ and CeO2 blend powders instead of commercially CYSZ powders. 8YSZ was mixed with different proportions of CeO2 (10, 20and 30 wt%). CYSZ agglomerated composite powders were then produced via spray drying and CYSZ coatings were deposited through PS-PVD spraying. Microstructures of composite powders and coatings were observed using SEM and EDS, and characterization of powders and coatings were evaluated via XRD, laser particle size measurement and XPS. Results showed agglomerated composite powders possessed high percentages of particles with optimum size and were suitable for subsequent PS-PVD process. The coatings prepared with reactive deposition had a typical columnar structure as current coating method. The coatings exhibited uniform distribution of all elements and consisted mainly of the t-ZrO2 phase. Crystal structure and properties of coatings were identical to coating deposited via solid phase reactive powder.