A mullite/Si multilayer coating was deposited on a SiC substrate using atmospheric plasma spraying. Mud cracking of the protective surface mullite layer was examined using a high-temperature observation system (HTOS). In-plane surface strain distributions were also measured using the digital image correlation (DIC) method. The experimental results showed that mud cracks nucleated in the mullite layer during heating, primarily due to shrinkage of the mullite during crystallization. The cracking event was detectable by mapping the maximum principal strain distribution. We clearly demonstrated that HTOS and DIC are effective tools for investigating the degradation mechanisms of thick coatings at high temperatures.