The microstructure and wear performance of Al2O3-13% TiO2 coatings prepared by plasma spraying of agglomerated nanoparticle powders were investigated. SEM analysis showed that the as-sprayed Al2O3-TiO2 coatings comprise of two kinds of typical region: fully melted region and unmelted/partially melted nanostructured region, which is different than the conventional coating with lamellar structure. It is shown that the microhardness of the nanostructured coatings was about 15%-30% higher than that of the conventional coating and the wear resistance is significantly improved, especially under a high wear load. The nanostructured coating sprayed at a lower power shows a lower wear resistance than the coatings produced at a higher power, because of the presence of pores and microstructural defects which are detrimental to the fracture toughness of the coatings.