Powder is the key factor for the preparation of?thermal barrier coatings?by plasma spray. This paper introduces the?methods?of preparing?zirconia hollow sphere powder and the performance of its coating. Plasma atomization and spray drying are two ways for the preparation of zirconia hollow sphere powder. Zirconia hollow sphere powder is easy to be melted and it forms?hollow?droplets after melted; the hollow droplet has a unique counter liquid jetting along with longer solidification?time during impacting onto the substrate, which thus leads to form smaller splat with uniform thickness and less defects after solidified. Coatings sprayed from zirconia hollow sphere powder have promising properties such as moderate porosity, low thermal conductivity, low module and high sintering resistance; it can meet the requirements of high performance thermal barrier coatings.