In this study, thermal barrier coatings (TBC) consisting of 3.5 mol% Yb2O3-stabilized ZrO2 co-doped with 1 mol% Gd2O3 and 1 mol% Yb2O3 (referred to as GdYb-YSZ) were fabricated by means of air plasma spraying. The as-fabricated coatings exhibited a metastable tetragonal (t′) structure. The hot-corrosion behavior of the GdYb–YSZ TBCs was investigated at 700, 800, 900, and 1000 °C for 10 h in the presence of V2O5 molten salt. During the corrosion tests, the t′ phase transformed into a monoclinic (m) phase; nevertheless, it was still detected on the corroded surfaces. The amount of t′ phase decreased with increasing corrosion temperature. The corrosion products formed on the GdYb-YSZ TBCs in V2O5 comprised Yb, Gd-doped YVO4, and m-ZrO2, irrespective of the temperature of corrosion. However, higher temperatures changed the morphologies of the Yb- and Gd-doped YVO4 corrosion products. The GdYb–YSZ TBCs exhibited improved corrosion resistance to V2O5 molten salt when compared to YSZ TBCs, and the related mechanism is discussed in detail in this paper.