Plasma-sprayed alumina-waste glass composite coatings on ceramic substrates were produced. Two kinds of alumina powders, different alumina volume fractions, and two glass powders particle size distributions were tested. Post-process thermal treatments were performed. The coatings were characterized by SEM, XRD, Vickers microhardness, fracture toughness, abrasion resistance tests. Coatings superior to traditional tile glazes were obtained with as high as 50 vol.% of waste glass. Fine glass powders (<45µm) must be employed to achieve adequate toughness. A low-cost spray-dried alumina can be used instead of the expensive commercial powders. The thermal treatment enhances the coating properties. A FEM thermo-mechanical simulation was performed. Elastic modulus calculations show a definite coating anisotropy (higher mechanical properties in the longitudinal direction). Compressive residual stresses in the alumina and tensile ones in the glass are developed after the thermal treatment. Crack propagation studies based on Griffith model show cracks initiating from larger pores and propagating easily through the glass, thus explaining the coating toughening achieved through the employment of finer glass powders. Cracks are stopped by alumina; this effect is enhanced in the thermally treated coatings. The numerical and experimental (from indentation fracture toughness test) crack propagation patterns are in good agreement.