The oxidation behavior of the bond coat is improved using a HVOF nanostructured NiCrAlY coating. NiCrAlY powder is mechanically cryomilled and HVOF sprayed onto Ni-based alloy to form a nanocrystalline bond coat. Oxidation is performed on the coating to form the thermally grown oxide layer (thermally grown oxide). After heat treatment at 1000.degree. C. for 24 and 95 hour, a homogeneous .alpha.-Al.sub.2O.sub.3 layer is formed on top of the bond coat. The nanostructured characteristic of the coating and the presence of Al.sub.2O.sub.3 within the cryomilled powders (oxidation occurred during cryomilling process) affects the nucleation of the alumina layer on the top of the coating. The formation of a continuous thermally grown oxide layer protects the coating from further oxidation and avoids the formation of mixed oxide protrusions, such as those presented in the coating sprayed using the as-received powder.