Thermal barrier coating (TBC) systems protect turbine blades against high-temperature corrosion and oxidation. They consist of a metal bond coat (MCrAlY, M = Ni, Co) and a ceramic top layer (ZrO2/Y2O3). In this work the oxidation behavior of conventional and nanostructured HVOF NiCrAlY coatings has been compared. Commercially available NiCrAlY powder was mechanically cryomilled and HVOF sprayed on a nickel alloy foil to form a nanocrystalline coating. Free-standing bodies of conventional and nanostructured HVOF NiCrAlY coatings were oxidized at a 1000°C for different time periods in order to form the thermally grown oxide (TGO) layer. The experiments show an improvement in oxidation resistance in the nanostructured coating when compared to that of the conventional one. This behavior is a result of the formation of a continuous Al2O3 layer on the top surface of the nanostructured HVOF NiCrAlY coating. This layer protects the coating from further oxidation and avoids the formation of mixed oxide protrusions present in the conventional coating.