The paper addresses the effect of processing parameters on microstructure and lifetime of electron beam physical vapor deposition, partially yttria-stabilized zirconia (EB-PVD PYSZ) coatings deposited onto NiCoCrAlY-coated Ni-base superalloys. In particular, the formation of a thermally grown oxide layer, an equi-axed zone, and various columnar arrangements of the highly textured PYSZ layers are discussed with respect to processing conditions. Three different microstructures were cyclically tested at 1100°C. The intermediate columnar structure was superior with respect to cyclic life times to a fine and to a coarse columnar structure which was mainly attributed to differences in the elastic properties. The effect of PYSZ microstructure on hot corrosion behavior of the thermal barrier coating (TBC) system at 950°C is briefly discussed.