The microstructure of Al2O3 formed by oxidation of a model NiCrAlY alloy during electron-beam physical vapor deposition of ZrO2-7.6 mol % YO1.5 is examined and compared with that formed on the bare substrate. The growth rate, morphology, and chemical composition of the oxide vary among the different constituents of the alloy surface and are further influenced by the O-2 partial pressure and the physical presence of the thermal barrier coating (TBC) layer. These differences, however, are largely limited to the outer oxide layer. The interplay between the TBC and the growing oxide leads to the formation of a fine-grain Al2O3ZrO2 "mixed zone" within the thermally grown oxide. A mechanism is outlined to explain this behavior, based on the dissolution of ZrO2 in a transient Al2O3 structure growing by outward diffusion of Al, and its subsequent reprecipitation when the metastable phase transforms to the stable alpha-Al2O3 form.