High energy ball milled nanostructured Al₂O₃ (“N”), fused/crushed conventional Al₂O₃ (“C”) and sintered nanostructured Al₂O₃ (“S”) powders were air plasma sprayed on 304 stainless steel. The nanostructured powder was composed of nanoparticle agglomerates, whereas the conventional powder consisted of solid granules. The average crystal size of the powders was estimated by X-ray diffraction based methods (the Scherrer equation and the Williamson Hall plot). Deviations between the crystal sizes calculated by the two methods indicated high lattice strain induced by the nanopowder production technique. Sintering of the nanopowder did not cause any considerable grain growth; moreover, the strain was alleviated. The melting degree of the powders, reflected by the γ-Al₂O₃ content of the coatings, depended on their porosities. Coatings “N” presented the lowest melting degree due to the inherent porosity of the agglomerated nanoparticles composing powder “N”. As a result, their microstructure was characterized by high porosity and extensive microcracking. The “S” coatings exhibited higher melting degree than that of the “N” coatings (similar to that of the “C” coatings), due to a tighter microstructure attained by sintering. At the same time, part of the initial nanostructure had been preserved during sintering and spraying. The “S” coatings presented the highest adhesion because they combined a high melting degree with pockets of retained nanostructure; the latter could act as crack arresters. Increasing the spray power led to an increase in the melting degree and, consequently, a decrease in the coating porosity and an increase in the porosity affected properties (adhesion and hardness).