Zirconia and hafnia based thermal barrier coating materials were produced by industrial prototype electron beam-physical vapor deposition (EB-PVD). Columnar microstructure of the thermal barrier coatings were modified with controlled microporosity and diffuse sub-interfaces resulting in lower thermal conductivity (20-30% depending up on microporosity volume fraction), higher thermal reflectance (15-20%) and more strain tolerance as compared with standard thermal barrier coatings (TBC). The novel processed coating systems were examined by various techniques including scanning electron microscopy (SEM), X-ray diffraction, and thermal conductivity by laser technique, hemispherical reflectance and thermal cyclic tests. The test results showed the tailored-microstructural TBC offered superior performance over the conventional thermal barrier coatings (ZrO2 -8 wt.% Y2O3).