Microstructure, thermal insulation behavior and bonding strength of nanostructured 5%scandia, 0.5%yttria codoped zirconia (5.5 ScYSZ) and 25%ceria, 2.5%yttria co stabilized zirconia (27.5%CYSZ) coatings were investigated. ScYSZ and CYSZ nanostructured granules (as a top coat) and commercial NiCrAlY powder (as a bond coat) were thermal sprayed on an Inconel 738 substrate. The results revealed ScYSZ coating to have higher bonding strength. Nevertheless, due to higher porosity and the presence of local strains, the thermal insulation of nanostructured CYSZ coating was higher than for ScYSZ coating.