Ceramic coatings that can effectively prevent hydrogen permeation have a wide range of applications in hydrogen energy and nuclear fusion reactors. In this study, for the first time, the internal stress of Er 2 O 3 coatings was found to be a key factor that could determine their hydrogen permeation resistance and lifespan. The internal stress was controlled by designing layered Er 2 O 3 coatings. The internal stress increased with an increasing number of Er 2 O 3 layers. When the number of layers was below 15, the increased internal stress did not adversely affect the coating performance and might help to increase its hydrogen permeation resistance. Although the overall thickness of the 15-layer Er 2 O 3 coating was only 97 nm, its hydrogen permeation reduction factor (PRF) reached the highest value of 626, whereas a further increase in the internal stress detrimentally affected the ability of the coating to reduce hydrogen permeation. In addition, the experimental observations and simulation results revealed that the performance of the Er 2 O 3 coatings was related to the hydrogen atoms that penetrated the coating, which weakened the Er−O bonds and consequently decreased the Er 2 O 3 fracture limit. This study provides insights into the effects of internal stress and hydrogen penetration on the performance of ceramic coatings as hydrogen permeation barriers and will help guide strategies for the structure design of hydrogen permeation barriers possessing high PRFs and long lifespans.