The objective of the present work is to produce Mg-PSZ (magnesia partially stabilized zirconia) powders that were used to coat oxygen sensor tubes by plasma spraying. It is well known fact that zirconia based oxide thin films are the most widely used material as ionic conductors of oxygen. In this study, MgO stabilized ZrO2 powders were produced by the sintering and crushing method. Starting powders were a high grade ZrO2, and a natural hydromagnesite (Mg-HC) as MgO source. ZrO2, and MgO were mixed in the compositions of ZrO2 - 9mol % MgO. The mixtures were ball milled by using ZrO2 balls. The fine powders were stabilized via thermal treatment in air at 1540°C for 24 hours. The powders were calibrated to the correct particle size distribution for plasma spraying. All powder samples were characterised by a well-defined techniques with an exhibited an average particle size of 10 µm. The powders consisted of monoclinic, tetragonal and cubic phases. They were sprayed by plasma spray to produce high temperature Mg-PSZ coatings on oxygen sensor tubes. It is worthwhile to point out that high temperatures were generated in the plasma spray jet, and the rapid quenching of the molten Mg-PSZ droplets deposited on the cold substrate subsequently occurred. After this process, thermal treatments were carried out to improve the film density and microstructural stability.