TiO2 was doped into Er2O3-stabilized ZrO2 (ErSZ) to obtain desirable properties for thermal barrier coating (TBC) applications. The phase composition, thermal conductivity, and mechanical properties of TiO2-doped ErSZ were investigated. ErSZ had a non-transformable metastable tetragonal (t′) phase, the compound with 5 mol % TiO2 consisted of t′ and cubic (c) phases, while 10 mol % TiO2 doped ErSZ had t′, c, and about 3.5 mol % monoclinic (m) phases. Higher TiO2 doping contents caused more m phase, and the compounds were composed of t′ and m phases. When the dopant content was below 10 mol %, TiO2 doping could decrease the thermal conductivity and enhance the toughness of the compounds. At higher doping levels, the compounds exhibited an increased thermal conductivity and a reduction in the toughness, mainly attribable to the formation of the undesirable m phase. Hence, 10 mol % TiO2-doped ErSZ could be a promising candidate for TBC applications.