Thermal cyclic test at 1080 degrees C for various numbers of cycles was performed on suspension plasma-sprayed coatings of alumina-yttria-stabilized zirconia composites and yttria-stabilized zirconia ( YSZ ). The structural variations of composite coatings were studied to verify the possibility of production of nano-composite coatings with nano-dispersed oxides. The results showed that this composite exhibited a lower thermally grown oxide growth than that of the YSZ . New multi-constituent composites formed of alternative regions of nano-precipitates of alumina in zirconia matrix and nano-precipitates of zirconia in alumina matrix were developed via phase transformation through thermal cyclic process of amorphous-containing structure.