Ytterbium zirconate (Yb2Zr2O7) is one of the most promising materials for yttria-stabilized zirconia (YSZ) replacement as a thermal barrier coating (TBCs) application. In the presented report, the experimental synthesis of Yb2Zr2O7 coating using novel Reactive Plasma Spray Physical Vapor Deposition (Reactive PS-PVD) is described. The obtained coating, irrespective of the power current (1800, 2000 and 2200 A), was characterized by a hybrid structure and a thickness of about 80–110 μm. The results of XRD phase analysis showed the formation of ytterbium zirconate in the coating but the presence of ytterbium and zirconium oxides was also detected. The oxides were not observed in calcinated powder. The decrease in thermal conductivity with power current increase was observed. It was the result of higher thickness and better columnar structure of the coating obtained using higher power current of the plasma torch.