During this reporting period, we have made progress in the deposition and characterization of novel nanometer-layered yttria/zirconia coatings. Fully oxidized Y2O3/ZrO2 superlattices of bilayer thicknesses A ranging from 2 nm to 100 nm have been deposited at high rates of approximately equal 3.4 microns/hour, or 70% of the pure metal rates. The superlattices were structurally characterized using X-ray diffraction (XRD) and transmission electron microscopy (TEM). The ZrO2 layer exhibited its high temperature (greater than or equal 2400 deg C) cubic-fluorite structure at small layer thickness less than or equal 7 nm, epitaxially stabilized by the cubic Y2O3. The mechanical properties of the superlattices were measured using a nanoindenter and the thermal conductivity measurements by the 3omega method. The optical properties of oxides of Al, Y, Zr, and Y2O3/ZrO2 superlattices was investigated using spectroscopic ellipsometry. In addition, the thermal stability of the superlattices was investigated.