Fiber reinforcement is wildly used in the metal matrix composites to restrict the initiation and propagation of cracks. In thermal barrier coatings (TBCs), the thermo-mechanical stresses lead to formation and propagation of detrimental cracks which usually cause premature failure of TBCs. In our study, the reinforcement effect of yttria-stabilized zirconia (YSZ) fibers in TBCs Ni20Al bond coat has been investigated and the wettability of YSZ fibers was taken into account. Electroless plating was conducted on the surface of YSZ fibers to enhance the interfacial compatibility between YSZ fibers and Ni20Al. TBCs with Ni20Al bond coat and YSZ top coat were deposited onto the In738LC superalloys by supersonic atmospheric plasma spraying. The microstructure and morphology of TBCs with and without YSZ fibers were estimated. The cyclic oxidation behaviour was investigated at 1050 °C, and the TBCs with Ni-coated YSZ fibers show better cyclic oxidation resistance than conventional TBCs, which indicates that the addition of YSZ fibers can improve the cyclic life of TBCs. Further analysis shows that the fibers improved the thermal cycling resistance which could be attributed to the fiber bridging process.