The microstructural evolution of the NiCrAlY/CrON system during vacuum heat treatment and thermal exposure was investigated by scanning electron microscopy (SEM), X-ray diffraction (XRD) and transmission electron microscopy (TEM). The elastic modulus and residual stress of the coating system were measured by nanoindentation and photo-stimulated luminescence spectrum (PSLS) methods, respectively. It was shown that the series reaction of β→γ′→γ took place in the NiCrAlY coating, which contributed to a decrease in the Young’s modulus. The replacement of Cr 2 O 3 by Al 2 O 3 during thermal exposure resulted in an increase of the Young’s modulus of the barrier layer. A change in the residual stress in the barrier layer was due to a combination of thermal and growth stresses.