Al2O3-ZrO2 composite coatings were deposited by suspension thermal spraying of submicron feedstock powders. The suspensions were injected internally into a Mettech Axial III plasma torch and a Sulzer-Metco DJ-2700 HVOF gun. The different spray processes induced a variety of structures ranging from finely segregated ceramic laminates to alloyed amorphous composites. Mechanisms leading to these structures are related to the feedstock size and in-flight particle states. Compositionally segregated crystalline coatings, obtained by plasma spraying, showed the highest hardness of up to 1150 Hv0.3, as well as the highest abrasion wear resistance (ASTM G65). The HVOF coating exhibited the highest erosion wear resistance (ASTM G75), which was related to the toughening effect of small dispersed zirconia particles in the alumina-zirconia alloyed matrix. The HVOF microstructures also led to low thermal diffusivity, due to high amorphous phase content and limited particle bonding.