This paper describes experimental results of modified small punch( MSP) test conducted to evaluate the fracure characteristics and mechanical properties of plasma sparayed zirconia ($ZrO_2$ stabilized with 8wt. % $Y_20_3$ : YSZ) NiCrAlY composite. The mixing ratios of YSZ/NiCrAlY were 0/100, 25/75, 50/50, 100/0 v.%. Test temperatures ranged from 293K to 1473K. This study is directed at development of thermal barrrier coating(TBC) system with superior heat resistance and mechanical properties. The microstructure and fracture process of the composite were examined by SEM and AE method. The mechanical properties of 100% YSZ were nearly independent of the temperatures tested in this study. In contrast, the NiCrAlY-containing composites showed a significant decrease of the mechanical properties above 1273K, showing a ductile- brittle transition behavior up to the temperature. Furthermore, it can seen that 25% YSZ/75% NiCrAlY composite gave the highest fracure strength and fracture energy among the mixing ratio tested over the temperature range.