Nanostructured coatings undergo many processing challenges during atmospheric plasma spray if the feedstock is not well prepared. The effects of using spray drying on achieving a suitable feedstock for an even flow of nanoparticles through the gun, the selection of plasma gases for optimum heat transfer, and the velocity of the agglomerates during flight are highlighted in this communication. Analytical heat transfer calculations are used for coating property optimization. The physical characteristics of the nanoagglomerates are studied using diagnostics sensor and scanning electron microscopy. Transmission electron microscopy revealed the retention of nanostructures.