Double-ceramic-layered (DCL) thermal barrier coating system comprising of toughened Gadolinium zirconate (Gd 2 Zr 2 O 7 , GZ) as the top ceramic layer and 4.5mol% Y 2 O 3 partially-stabilized ZrO 2 (4.5YSZ) as the bottom ceramic layer was fabricated by plasma spraying and thermal shock behavior of the DCL coating was investigated. The GZ top ceramic layer was toughened by addition of nanostructured 3mol% Y 2 O 3 partially-stabilized ZrO 2 (3YSZ) to improve fracture toughness of the matrix. The thermal shock resistance of the DCL coating was enhanced significantly compared to that of single-ceramic-layered (SCL) GZ-3YSZ composite coating, which is believed to be primarily attributed to the two factors: (i) the increase in fracture toughness of the top ceramic layer by incorporating nanostructured YSZ particles and (ii) the improvement in strain tolerance through the utilization of 4.5YSZ as the bottom ceramic layer. In addition, the failure mechanisms are mainly attributed to the still low fracture toughness of the top ceramic layer and oxidation of the bond-coat.