This work describes acoustic emission (AE) experiments which have been carried out to study the deformation modes of plasma-sprayed ZrO//2-20 wt % MgO coatings subjected to tensile adhesion tests. Heat treatment of the coating changed the AE distribution and the fracture morphology, and this is ascribed to a change in the cracking process of the coating. Diffusion of Fe into the coating and sintered nature of the heat treated coatings play a part in increasing bond strength. Results show that AE methodology can be correlated to the TBC structure and bond strength, and these give insight into fundamental design criteria to improve coating integrity and performance.