A turbine engine component includes an electron beam-physical vapor deposition thermal barrier coating covering at least a portion of a substrate. The thermal barrier coating includes an inner layer having a columnar-grained microstructure with inter-columnar gap porosity. The inner layer includes a stabilized ceramic material. The thermal barrier coating also includes a substantially non-porous outer layer, covering the inner layer and including the stabilized ceramic material. The outer layer is deposited with continuous line-of-sight exposure to the vapor source under oxygen deficient conditions. The outer layer may further comprise a dopant oxide that is more readily reducible than the stabilized ceramic material. During deposition, the outer layer may also have an oxygen deficient stoichiometry with respect to the inner layer. Oxygen stoichiometry in the outer layer may be restored by exposure of the coated component to an oxidizing environment.