Liquid feedstock plasma spraying (LFPS) involves deposition of ultrafine droplets of suspensions or solution precursors (typically ranging from nano- to submicron size) and permits production of coatings with unique microstructures that are promising for advanced thermal barrier coating (TBC) applications. This paper reviews the recent progress arising from efforts devoted to development of high-performance TBCs using the LFPS approach. Advancements in both suspension plasma spraying and solution precursor plasma spraying, which constitute the two main variants of LFPS, are presented. Results illustrating the different types of the microstructures that can be realized in LFPS through appropriate process parameter control, model-assisted assessment of influence of coating defects on thermo-mechanical properties and the complex interplay between pore coarsening, sintering and crystallite growth in governing thermal conductivity are summarized. The enhancement in functional performances/lifetime possible in LFPS TBCs with multilayered architectures and by incorporating new pyrochlore chemistries such as gadolinium zirconate, besides the conventional single 8 wt.% yttria-stabilized zirconia insulating ceramic layer, is specifically highlighted.