There is a need to thermally protect titanium (Ti) alloys so that they can be used in high temperature environments, such as during hypersonic flight. In this study, a thermal barrier coating (TBC) system was developed using reactive magnetron sputtering. The coating system consists of a nickel chromium aluminum yttrium (NiCrAlY) bond coat and an yttria-stabilized zirconia (YSZ) top coat. The YSZ layer was deposited by reactive pulsed direct current (DC) magnetron sputtering a Zr-Y target in a gas mixture comprised of argon (Ar) and oxygen (O2). The pulsed DC magnetron sputtering process used closed-loop control with the cathode voltage as the feedback signal. The YSZ coatings were deposited at different cathode voltage feedback signals. The phase structure, elemental composition, microstructure, and thickness of the YSZ coatings were examined by different means. It was found that up to 69% of the metallic deposition rate can be achieved for obtaining near stoichiometric YSZ coatings. The YSZ coatings exhibit single cubic phase structure with an Y2O3% in the range from 6.5 mol% to 8 mol%. The developed TBC consists of a 2 μm Ti adhesion layer, a 30 μm NiCrAlY bond coat, and a 40 μm YSZ top coat deposited on Ti-6Al-4 V substrate. The NiCrAlY layer exhibited a dense structure and the YSZ layer exhibited a porous columnar grain structure. The TBC showed excellent adhesion on Ti-6Al-4 V. The coated Ti-6Al-4 V was annealed from 800 °C to 1000 °C in air to evaluate the thermal protection capability of the coating. No degradation of the TBC was observed and the Ti-6Al-4 V alloy preserved fine gains and desired mechanical properties up to 900 °C. However, the coating showed horizontal cracks and degradation at the interface between the Ti-6Al-4 V substrate and the NiCrAlY bond coat at 1000 °C. It is assumed that the outward diffusion of Al from the Ti alloy led to the coating failure at the interface. This indicates that new diffusion barrier layers are needed as part of the TBC system.