Abstract: The oxidation-corrosion resistance of plasma sprayed MCrAlY overlay coatings is improved. The coating method involves plasma spraying the MCrAlY coating alloy onto a superalloy substrate, applying a chromium or aluminum envelope over the outer surface of the coating or mechanically working the outer surface to seal the surface against penetration by the high pressure isostatic atmosphere to be subsequently applied and then hot isostatically pressing the coated substrate to close the coating defects and diffuse at least a portion of the envelope, if present, into the overlay coating. The invention thus can provide an MCrAlY coating not only substantially free of pores, voids and the like defects but also having at least an outer zone enriched in chromium, aluminum or like metals.