ZrO//2-7. 8mol. %YO//1//. //5, a fused powder, and ZrO//2-8. 7mol%YO//1//. //5, a prereacted powder, were plasma sprayed onto steel substrates. Neutron diffraction and X-ray diffraction of the as-received powder, the powder plasma sprayed into water, as-sprayed coatings and coatings heat treated for 10 and 100 h were carried out to study phase transformations and ordering of the oxygen ions on the oxygen sublattice. An ordered tetragonal phase is detected by the presence of extra neutron diffraction peaks. These phase transformations and ordering will result in volume changes. The implications of these transformations on the performance of partially stabilized zirconia thermal barrier coatings is discussed.