This paper investigates the effect of nano-size and micron-size Y2O3 powder-coated specimen on high-temperature oxidation resistance of low-alloy Cr-Mo steel (2.25 Cr-1 Mo steel). Both are powder coated by plasma spray coating method. The oxidation rate and reaction kinetics are studied and the post-corroded scales are characterized in Field Emission Scanning Electron Microscope and X-ray Diffraction. The results clearly indicate that nanosize Y2O3-coated (nanostructured) specimen improves the high-temperature oxidation resistance in comparison to the micron-size Y2O3-coated specimen. The detail mechanism of the oxidation of both the coated specimen is discussed in detail in this paper.