Zirconia and hafnia based thermal barrier coating materials were produced by industrial prototype electron beam-physical vapor deposition (EB-PVD). Columnar microstructure of the thermal barrier coatings were modified with controlled microporosity and diffuse sub-interfaces resulting in lower thermal conductivity ( 20 - 30% depending up on microporosity volume fraction), higher thermal reflectance ( 15 - 20%) and more strain tolerance as compared with standard thermal barrier coatings (TBC). The novel processed coating systems were examined by various techniques including scanning electron microscopy (SEM), X-ray diffraction, thermal conductivity by laser technique, and hemispherical reflectance. (C) 2004 Kluwer Academic Publishers.