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Thermal barrier coatings are becoming increasingly important in providing thermal insulation for heat engine components. Thermal insulation reduces in-cylinder heat transfer from the engine combustion chamber as well as reducing component structural temperatures. Containment of heat also contributes to increased in-cylinder work and offers higher exhaust temperatures for energy recovery. Lower component structural temperatures will result in greater durability. Advanced ceramic composite coatings also offer the unique properties that can provide reductions in friction and wear. Test results and analysis to evaluate the performance benefits of thin thermal barrier coated components in a single cylinder diesel engine are presented.