Further improvements in the efficiency of gas turbines are recognised to come from increases in turbine entry temperatures. Accurate temperature measurements are crucial to achieve these increases whilst maintaining reliability and economic component life. The combination of phosphor thermometry and thermal barrier coating (TBC) technology has led to the development of functional temperature sensor coatings which have several advantages over conventional temperature measurement techniques. Developments in sol–gel processing indicate that this method could be used for the production, or particularly, the repair of TBCs in the future.This paper demonstrates, for the first time, that sol–gel processing can be used to make sensor TBCs. The optimum concentration of SmO1.5 was 2wt.% in YSZ to achieve the brightest phosphorescence emission. Above this concentration the overall intensity of the emission reduces and the transitions from 4F3/2 were suppressed. Furthermore, a similar suppression of these transitions was observed when the product of the sol–gel was heat treated to 1100°C. This was concluded to be due to a higher degree of crystallinity allowing a greater interaction between the dopant ions. The dependence of the phosphorescence spectrum on heat treatment temperature provides the first indication that YSZ produced through sol–gel could be used to detect historic temperatures.An evaluation of the subsurface measurement and temperature capabilities has shown that the phosphorescence can be detected from relatively thin layers, 20μm, even under 50μm of undoped YSZ coating. Although the temperature detection range, 400–700°C, is too low for advanced TBCs the material could be used in low temperature regimes or for health monitoring purposes.