Cr3C2-NiCr thermal spray coatings have been extensively applied to mitigate erosion in high temperature applications such as aircraft and power generation turbines. Much laboratory based erosion research has been conducted under ambient temperature and mild erosion conditions. However, little has been presented about the coating response under the high temperature, high velocity erosion conditions typically experienced in industrial applications. This work presents the mechanisms of high velocity erosion based on experiments conducted under realistic service conditions. Single impact studies were carried out on a range of Cr3C2-NiCr coatings to assess the variation in erosion mechanism with phase degradation and starting powder morphology. Comparisons were made between the coating response in the as-sprayed state and after long-term heat treatment to determine how the erosion response changes as a function of exposure time in-service. Erosion of the as-sprayed coatings was heavily influenced by splat boundary related mass loss mechanisms. This was accentuated by in-flight carbide dissolution in the coatings based on agglomerated/sintered powders. Heat treatment led to splat sintering and a transition in the erosion response towards more microstructural based erosion mechanisms. The variation in erosion response as a function of microstructural development with heat treatment and starting powder type is presented.