The thermal barrier coating system comprises a matrix of a first chemistry with multiple embedded second phases of a second chemistry. The matrix comprises a stabilized zirconia. The second regions comprise at least 40 mole percent of oxides having the formula Ln2O3, where Ln is selected from the lanthanides La through Lu, Y, Sc, In, Ca, and Mg with the balance zirconia (ZrO2), hafnia (HfO2), titania (TiO2), or mixtures thereof. The second phases have a characteristic thickness (T6) of less than 2.0 micrometers (μm). The spacing between second phases has a characteristic thickness (T5) of less than 8.0 micrometers (μm).