The use of Atmospheric Plasma Spraying (APS) and yttria stabilized zirconia (YSZ) nanostructured coatings has been applied to the bond layer of NiCrAlY coated engine cylinder heads, pistons, and valve substrates. Thermal barrier coatings (TBCs) have been utilized to increase the engine performance in the design of combustion chamber components for internal combustion engines. ASTM-C-633-01 standard has been employed to conduct the bonding strength testing. It was also considered and directed to estimate the coating’s thermal performance by evaluating its insulation value and conducting a thermal insulation durability assessment. Field emission scanning electron microscope (FESEM) and X-ray diffraction (XRD) were used to look at the nano powders and coatings’ microstructures and phase compositions. In YSZ, it was discovered that the topcoat of samples had a tri-modal pattern of nano sized particles engaged by the powder, micro-columnar grains generated from the re-solidification of the molten part of the powder, and almost equiaxed grains, which were a unique construction feature. The results demonstrated the creation of nano zones in one of three nanostructured coating zones and improved the top coating properties, including bonding strength and thermal insulation capacity. The high temperature of the diesel engine caused fatigue failure in the intake and exhaust valves.