Yttria-stabilized zirconia (YSZ), a typical thermal barrier coating, faces challenges in meeting the stringent service requirements of critical components such as aero-engine blades due to high-temperature phase transitions and susceptibility to sintering. In the short term, optimizing the coating structure provides an effective and cost-efficient solution to this problem. This study deposited a multi-modal YSZ coating using supersonic atmospheric plasma spraying. The evolution of the microstructure and thermal-mechanical properties of the coating during sintering was systematically studied. The results showed that the multi-modal YSZ coating mainly comprised crystalline regions and unmelted particles, which remained stable after sintering at 1200 °C for 100 h. During sintering for less than 20 h, micro-defects such as cracks and pores rapidly healed by forming sintering necks, significantly enhancing hardness and elastic modulus of the coating. After 50 h, rapid sintering of the unmelted particles led to the formation of interfacial cracks between these particles and the crystalline regions. This effectively reduced the coating's thermal conductivity by inhibiting heat transfer, which slowed down sintering behavior and maintained the stability of hardness and elastic modulus.