It can’t be avoided reducing heat loss from in-cylinder wall for further improvement in brake thermal efficiency (BTE). Especially for diesel engines, spray flame interference on the cavity and piston top wall during combustion period could be a major cause of the heat loss. To reduce heat transfer between hot gas and cavity wall, thin Zirconia layer (0.5mm) on the cavity surface of the forged steel piston was firstly formed by thermal spray coating aiming higher surface temperature swing precisely synchronized with flame temperature near the wall resulting in the reduction of temperature difference. However, no apparent difference in the heat loss was observed. On the contrary, BTE was deteriorated by the increase in other energy losses. To find out the reason why heat loss was not so improved, direct observation of flame impingement to the cavity wall was carried out with the top view visualization technique, for which one of the exhaust valves was modified to a sapphire window. Local flame behavior very close to the wall was compared by macrophotography. Numerical analysis by a three-dimensional simulation was also carried out to investigate the effect of several parameters on the heat transfer coefficient. From the observation of wall impinged flame, it was revealed that a kind of quenching layer with Zirconia coating was thinner than the baseline, which could be resulted in the increase in heat transfer coefficient. Furthermore, the numerical simulation results suggested that higher wall surface temperature swing with Zirconia coating is not only the main cause of thinner boundary layer, but surface roughness and/or porous structure is. To confirm the hypothesis, new pistons with different insulating structures were then experimented. Even though the heat loss was not so improved because of the limited area of insulation, the potential for BTE improvement was confirmed.