A reduced thermal conductivity thermal barrier coating having improved impact resistance for an underlying substrate of articles that operate at, or are exposed to, high temperatures. This coating comprises an inner high fracture toughness layer nearest to the underlying substrate and having a thickness up to about 5 mils (127 microns) sufficient to impart impact resistance to the thermal barrier coating, and comprises a zirconia-containing ceramic composition having a c/a ratio of the zirconia lattice in the range of from about 1.011 to about 1.016 and stabilized in the tetragonal phase by a stabilizing amount of a stabilizing metal oxide selected from the group consisting of yttria, calcia, ceria, scandia, magnesia, india, lanthana, gadolinia, neodymia, samaria, dysprosia, erbia, ytterbia, europia, praseodymia, and mixtures thereof. The thermal barrier coating further includes an outer thermal insulating layer adjacent to and overlaying the inner layer and comprising a ceramic thermal barrier coating material. The thermal barrier can be used to provide a thermally protected article having a substrate (e.g., metal substrate) and optionally a bond coat layer adjacent to and overlaying the substrate. The thermal barrier coating can be prepared by forming the inner high fracture toughness layer, followed by forming on the inner layer the outer thermal insulating layer.