Observations and measurements have been performed on a thermal barrier system comprising a Pt-aluminide bond coat and a thermal barrier coating deposited by electron beam evaporation. Past research has highlighted a displacement instability in the thermally grown oxide (TGO), as it affects the failure mechanism in the thermal barrier coating (TBC). Phase transformations in the bond coat have also been identified, with a proposed role in the TGO instability. The present study assesses this influence by characterizing the transformations as well as their spatial correlation with the instability sites. Both the isothermal transformation from beta --> gamma' and the martensite transformation in the beta have been addressed. Toward the end of life, the instabilities are preferentially located in the beta phase, between neighboring domains of gamma'. After cycling, the composition of the beta grains is spatially uniform. Within the gamma', there are Ni and Al composition gradients in narrow layers near the interfaces with the beta phase and the TGO. An evaluation suggests that the primary influence of transformation on the cyclic displacement of the TGO is to create a local misfit between the growing gamma' domains and the volume strain accompanying the martensite transformation in the intervening beta phase, upon cooling and reheating.