A novel approach hybridizing the conventional atmospheric plasma spraying and the solution precursor plasma spraying techniques has been explored to develop nanocomposite coatings. The above hybrid processing route involves simultaneous feeding of an appropriate solution precursor and commercially available spray-grade powder feedstock to realize microstructures comprising nanostructured and micron-sized features, which are unique in thermal spraying. The attractive prospects offered by this hybrid technique for deposition of nanocomposite coatings are specifically highlighted in this paper through a case study. Plasma sprayed Mo-alloy coatings are known for their good tribological characteristics and widely used in many applications. Further augmentation in performance of these coatings is expected through incorporation of distributed nanostructured oxide phases in the microstructure. Successful development of such coatings using a spray-grade Mo-alloy powder and a suitable oxide-forming solution precursor has been demonstrated. Splat formation under varied processing conditions has been comprehensively investigated and related to microstructure and tribological behavior of the coatings to assess the efficacy of the above nanocomposite coatings for wear resistant applications. © 2014, ASM International.