A new family of spherical powders produced by the spray drying route has been developed. This paper describes as an example the manufacturing method of an Y2O3-coated aluminum powder. Atmospheric Plasma Spraying (APS) was used to test the corresponding coatings. Morphology and phases of powders and coatings were investigated by optical and scanning electron microscopy while the level of porosity was evaluated using image analysis. Results show that homogenous composite coatings can be obtained from cladded spray dried powders.