The objective of this investigation was to improve the thermal properties of plasma sprayed thermal barrier coatings (TBC) for internal combustion engines. There is a need for further reduction of thermal conductivity and volumetric heat capacity and the negative effects on heat loss and combustion phasing of surface roughness and permeable porosity, typical for plasma sprayed coatings, should be minimized. Four measures for improvement of TBC properties were evaluated: I) modification of the coating’s microstructure by using a novel suspension plasma spraying method, ii) application of gadolinium-zirconate, a novel ceramic material with low thermal conductivity, iii) polishing of the coating to achieve low surface roughness, and iv) sealing of the porous coating surface with a polysilazane. Six coating variants with different combinations of the selected measures were applied on the piston crown and evaluated in a single cylinder light duty diesel engine. The experimental data was modeled with multiple linear regression to obtain confidence intervals for the measurement results and to correct the data for variations of surface roughness, combustion phasing and compression ratio for the different pistons. The main tool for evaluation of the coating properties was cylinder pressure analysis, providing the apparent rate of heat release, indicated efficiency, wall heat loss, and exhaust loss. The new TBC microstructure from suspension plasma spraying in combination with the use of gadolinium-zirconate showed promising results with respect to indicated efficiency and heat loss reduction. © 2019 SAE International and © 2019 SAE Naples Section. All rights reserved.