Ni-PSZ composite coatings with various PSZ particle content were prepared by the electroforming technique. The microstructure and surface components of the coatings have been examined by optical microscopy, electron microscopy and X-ray photoelectron spectroscopy analysis and the wear properties of the coatings tested on a reciprocating wear test machine. The results show that the PSZ particles are uniformly dispersed in the coatings and thus increase the wear resistance of the coatings by inhibiting plastic deformation of the nickel matrix. The co-deposition of the PSZ particles in the electrolyte is mainly in the form of agglomeration and is accompanied by the incorporation of Ni(OH)(2). When the PSZ content in a coating is higher than a critical value, the wear resistance of the coating could deteriorate because of the decrease in the integrity of the nickel matrix. After heat-treatment at high temperature, Ni(OH)(2) in the coating is turned into Ni2O3 and NiO which can wet the PSZ particles and increase the bonding strength between the PSZ and nickel. In addition, the agglomerated PSZ particles are sintered when heat-treated. These are all beneficial to increasing the wear resistance of the coating.