In this paper, yttria partially stabilized zirconia (YSZ) thermal barrier coatings (TBCs) were deposited by air plasma spraying (APS) method on nickle-based superalloy with initially sprayed NiCoCrAlYTa bond coat. After that, the surface of the plasma sprayed TBCs was subjected to the peg-nail structure selective laser modification using a Nd:YAG pulsed laser. The microstructure and performance of the plasma sprayed and laser modified YSZ coatings were investigated. The results revealed that the peg-nail structure selective laser modification helped to reduce the surface roughness considerably, eliminate to surface porosities and produced a network of continuous cracks perpendicular to the surface. The microstructure of laser modified area consisted of columnar grains in the cross-section and equiaxed grains on the surface. XRD patterns showed that both as-sprayed and the peg-nail structure laser modified coatings consisted of nonequibrium tetragonal (T'') phase, however, monoclinic (M) phase disappeared and intensity of T'' phase slightly increased in the range of 72-76°（2θ) after the peg-nail structure laser modification. It has been found that the average bond strength YSZ coatings was enhanced from 7.3 MPa to 13.3 MPa after the peg-nail structure laser modification. Thermal insulation capability of the peg-nail structure laser modified TBCs, as compared to the as-sprayed TBCs, was decreased due to microstructure change in the ceramic top coat.