An advanced ceramic material of perovskite structure, Sc2O3 (5 mol%) and Gd2O3 (5 mol%) co-doped SrZrO3, was investigated as a material for thermal barrier coating (TBC) applications. Sr(Zr0.9Sc0.05Gd0.05)O2.95 (SZSG) was synthesized using ball milling prior to solid-state sintering, and had a minor second phase of Gd2O3. The material showed good phase stability not only from room temperature to 1400°C, but also at high temperature of 1450°C for a long period, analyzed by DSC and XRD, respectively. The thermal expansion coefficients (TECs) of the sintered bulk SZSG were recorded by a high-temperature dilatometer and revealed a positive influence on phase transitions of SrZrO3 by co-doping Sc2O3 and Gd2O3. The thermal conductivity of SZSG had much lower values in contrast to that of SrZrO3 and Sr(Zr0.8Gd0.2)O2.9 in whole tested temperature range. The good chemical compatibility was observed for SZSG with 8YSZ or Al2O3 powders. All the results revealed that SZSG might be a potential material for TBC applications at higher temperatures compared with 8YSZ.