The plasma spray process was used to deposit. coatings of ZrO₂- MgO powders onto SM45C substrate, and the characteristics of as-deposited and heat. treated coatings have been investigated. Particulary, the variations of microstructure, porosity, wear resistance, thermal shock resistance and thermal barrier in ZrO₂- MgO coatings after heat treatment under lower pressure have been investigated. It was found that coatings of ZrO₂- MgO is consist of layered structure with thickness 2-3㎛, and with grain size of 0.O6㎛. The amount of prosity was increased with increased spray distance, and the lowest amount of porosity was obtained at the arc current of 450A, and at the spray distance of 50mm. After heat treatment, the amount of porosity was found to be decreased, and wear resistance, microhardness and thermal shock resistance were improved. However, the thermal barrier were decreased.