TiO2-doped Y2O3-stabilized ZrO2 compounds with low thermal conductivity have been considered as a promising thermal barrier coating material. In the present research, a series of TiO2-doped Y2O3-stabilized ZrO2 compounds have been synthesized and investigated. Lattice distortion and disordering caused by TiO2 doping were observed and their effects on mechanical properties, such as fracture toughness, elastic modulus, and coefficient of thermal expansion (CTE), were also investigated. Lattice distortion enhanced the ferroelastic toughening and the fracture toughness, whereas the variation in elastic modulus and CTE is due to the lattice disordering. The combination of thermal and mechanical properties bodes well for the potential application as thermal barrier coating materials.