The present paper reports the experimental results for the displacement instabilities occurring near the surface grooves of substrate of Fecralloy material in thermal barrier coatings (TBCs). Two groups of groove with different orientations were carved on the surfaces of specimens. The specimen were then mounted on micro-creep tester and subjected to thermo-mechanical cycling for various holding temperatures and tensile stresses. The result shows that the displacement instability near the horizontal groove decreases significantly as the tensile stress increases, while that near the vertical groove increases with the tensile stress. The higher temperature can cause bigger displacement instability for vertical and horizontal grooves. It is also found that the addition of the yttrium into the substrate considerably improves the interface roughness leading to smaller displacement instability compared to that without yttrium doped.