Hydrotubines do face regular exposure to cavitating environment, causing damage to guide vanes, impeller, nozzle, buckets and spear. Quite a large number of surface modification techniques have been employed to counter such a deleterious effect. Among these large numbers of techniques, thermal spray coatings has been mostly focused and studied. In the present work one such technique has been opted for study. Selection of coating technique and composition was made keeping their economical viability in mind. Hardness and toughness have been identified as significant factors effecting cavitation erosion of materials. In-depth analysis of erosion mechanism of coated and un-coated samples was undertaken using SEM/EDS, micro-hardness tester and XRD. Erosion mechanism of steel was mainly plastic deformation, whereas in case of coating, (i) lack of adhesion between splats (ii) lower toughness of alumina (iii) loosely bonded un-melted alumina particles, were dominant factor controlling the erosion mechanism of coating. © (2012) Trans Tech Publications, Switzerland.