The key issues for thermal barrier coating development are high temperature capability and durability under thermal cyclic conditions as experienced in the hot section of gas turbines. Due to the complexity of the system and the interaction of the constituents, performance improvements require a systems approach. However, there are issues closely related to the ceramic top coating and the bond coat, respectively. Reduced thermal conductivity, sintering, and stresses within the ceramic coating are addressed in the paper as well as factors affecting failure of the TBC by spallation. The latter is primarily governed by the formation and growth of the thermally grown oxide scale and therefore related to the bond coat. A strategy for lifetime assessment of TBCs is discussed.