The development of plasma-sprayed protective layers to enhance the surface properties of critical engineering components represents one of the most promising achievements of materials technology in recent times. The important aspects associated with plasma spraying of ceramic powders are discussed and the influence of the powder characteristics on the quality of sprayed coatings is highlighted. The advantages of the sol-gel technique for preparing spray grade powders are briefly outlined. The sol-gel synthesis of a Yttria-stabilized-zirconia powder is discussed as a case study. Results of powder characterization studies and evaluation of its plasma sprayed coating are also presented.