Suspension of YSZ and Al particles in acetone in presence of 1.2 g/1 iodine as dispersant was used for electrophoretic deposition of green form YSZ/Al coating. Results revealed that applied voltage of 6 V and deposition time of 3 min were appropriate for deposition of green composite form coating. After deposition, a nanostructured dense YSZ/Al2O3 composite coating was fabricated by oxidation of Al particles at 600 degrees C for 2 h and subsequently sintering heat treatment at 1000 degrees C for 2 h. Melting and oxidation of Al particles in the green form composite coating not only caused reaction bonding between the particles but also lowered the sintering temperature of the ceramic coating about 200 degrees C. The EDS maps confirmed that the composition of fabricated coating was uniform and Al2O3 particles were dispersed homogenously in YSZ matrix.