Ni-Al intermetallics have excellent corrosion and oxidation resistance, but their use in thermal spraying has been limited due to issues with in-flight oxidation. In this study, a novel approach is proposed to remove oxide from Ni-Al droplets in-flight by adding a deoxidizer (diamond) to the feedstock powder. A mixture of nickel, aluminum, and diamond powders was mechanically alloyed using a combination of cryogenic and planetary ball milling. The resulting Ni/Al/diamond composite powder was then plasma sprayed via the APS process, forming Ni-Al coatings on Inconel 738 substrates. Phase composition, microstructure, porosity, and microhardness of the coatings were characterized by X-ray diffraction, scanning electron microscopy, image analysis, and hardness testing, respectively. Oxygen content measurements showed that the coatings contained significantly less oxygen than coatings made from ordinary Ni/Al powders. In-flight particle temperatures were also measured and found to be higher than 2300 °C. The low oxygen content in the coatings is attributed to the in-situ deoxidizing effect of ultrahigh temperature droplets which are also oxide-free.