The oxidation behavior of a nanostructured CoNiCrA1Y bond coat dispersed nano-sized alumina particles was compared to that of a conventional coarse-grained CoNiCrA1Y bond coat. It was found that after a 1000ºC/24 h oxidation a protective alumina layer was developed on the nanostructured coating, whereas a mixed and less protective oxide layer was observed on the conventional coating. Correspondingly, spallation of the oxide layer was not observed with the nanostructured coating but did occur with the conventional coating. The improvement in oxidation behavior observed in the nanostructured coating was suggested to be due to its fine-grained structure, which provides rapid pathways (grain boundaries) for A1 diffusion to form a protective scale of pure alumina. Furthermore, the dispersion of the nano-sized alumina particles was effective in suppressing grain growth and in promoting the rapid formation of a protective alumina scale and thus significantly improving the oxidation resistance of the bond coat.