A significant number of gas turbines, aircraft engines, bearings, and automotive engines operating under a wide temperature range fail frequently due to fatigue and surface oxidation. Thus, a new coating formulation 40Al-35Al(2)O(3)-25ZrO(2 )was deposited on 316L SS substrate through the high velocity oxygen-fuel(HVOF)thermal spray coating method. The number of passes, spray distance and oxygen flow rate were varied by using Taguchi L9array to achieve an optimized coating with higher hardness, less porosity, and roughness. The coating phase analysis, microstructure, elemental composition, microhardness and nano hardness were examined by x-ray diffraction(XRD), scanning electron microscopy(SEM),field emission scanning electron microscopy(FESEM), energy dispersivex-ray spectroscopy(EDX), Vickers microhardness and nano indentation testing. The sample 5prepared at spray distance of 20 cm and oxygen/acetylene ratio of 2 exhibited optimal hardness(1972HV(1)), tensile strength(6.463 GPa), porosity(0.75%)and roughness(6.2 mu m)due to alpha-Al(2)O(3 )and t-ZrO2 phases. Oxygen flowrate was the influential parameter contributing 48.71% to microhardness and 42.41% to roughness, while spray distance with contribution 51.62% was influential parameter for porosity.