Abstract. Nano-science & technology is one of the most important scientific fields, and the material processing using the nano-technology is now advanced towards more precise and controllable smart stage. Regarding thermal processing, plasma system with high precise, has been expected for smart thermal processing. The gas tunnel type plasma system developed by the author exhibits high energy density and also high efficiency. Among the applications to the various thermal processing, one practical application is plasma spraying of ceramics such as Al 2 O 3 and ZrO 2 . The characteristics of these ceramic coatings were superior to the conventional ones. The ZrO 2 composite coating has the possibility of the development of high functionally graded TBC (thermal barrier coating). In this study, the performance such as the mechanical properties, thermal behavior and high temperature oxidation resistance of the alumina/zirconia functionally graded TBCs produced by gas tunnel type plasma spraying was investigated and discussed. The results showed that the alumina/zirconia composite system exhibited the improvement of mechanical properties and oxidation resistance. Now, one of the advanced plasma application, a smart coating technology, is expected to obtain the desired characteristics of ceramics with improved corrosion resistance, thermal resistance, and wear resistance.