Thermal barrier coatings are becoming increasingly important in providing thermal insulation for heat engine components. Thermal insulation reduces in-cylinder heat transfer from the engine combustion chamber as well as reducing component structural temperatures. Containment of heat also contributes to increased in-cylinder work and offers higher exhaust temperatures for energy recovery. Lower component structural temperatures will result in greater durability. Advanced ceramic composite coatings also offer the unique properties that can provide reductions in friction and wear.Test results and analysis to evaluate the performance benefits of thin thermal barrier coated components in a single cylinder diesel engine are presented. The procedure includes the performance testing of a reduced cooling partially air gap insulated metal baseline engine, a coated cylinder liner build and a fully insulated build where the cylinder liner, piston top and cylinder headface are coated with a thin thermal barrier ceramic composite material.Test results indicate that coatings on the cylinder liner bore produced a reduction in fuel consumption while coatings on the piston and cylinder headface surface were more effective in reducing heat rejection.