The aim of this investigation was to nondestructively evaluate the residual stress profile in two commercially available alumina/substrate coating systems and relate residual stress changes with the fracture response. Neutron diffraction, due to its high penetration depth, was used to measure residual strain in conventional air plasma-sprayed (APS) and finer powder high velocity oxy-fuel (HVOF (theta-gun))-sprayed Al2O3 coating/substrate systems. The purpose of this comparison was to ascertain if finer powder Al2O3 coatings deposited via theta-gun can provide improved residual stress and fracture response in comparison to conventional APS coatings. To obtain a through thickness residual strain profile with high resolution, a partially submerged beam was used for measurements near the coating surface, and a beam submerged in the coating and substrate materials near the coating-substrate interface. By using the fast vertical scanning method, with careful leveling of the specimen using theodolites, the coating surface and the coating/substrate interface were located with an accuracy of about 50 mu m. The results show that the through thickness residual strain in the APS coating was mainly tensile, whereas the HVOF coating had both compressive and tensile residual strains. Further analysis interlinking Vickers indentation fracture behavior using acoustic emission (AE) was conducted. The microstructural differences along with the nature and magnitude of the residual strain fields had a direct effect on the fracture response of the two coatings during the indentation process.