Nanostructured lanthana-doped yttria-stabilized zirconia thermal barrier coatings were developed using the air plasma spraying technique. Scanning and transmission electron microscopy studies revealed that the coatings are characterized by a bimodal microstructure consisting of melted zones, nano-zones, splats, nano-pores and micro-cracks, which are typical features of nanostructured plasma-sprayed coatings. These coatings are tetragonal in phase, with a grain size of 30–60 nm. The thermal conductivity achieved by these coatings is lower than that of nanostructured and traditional yttria-stabilized zirconia coatings.