In this paper, composite coating (about 400 μm thick) was prepared by SHS plasma spraying technology using micro-dimensional Fe2O3-Al composite feedstock, which was fabricated by mechanical glomeration. The composition and microstructure of the coating were analyzed by X-Ray diffraction, scanning electron microscopy and transmission electron microscopy. Meanwhile, the microhardness, fracture toughness and wear resistance were also measured. It shows that the skeleton of the coating is mainly composed of nanostructured FeAl2O4 and Al2O3, and the dispersed phase is nanosized Fe. The composite coating possesses satisfactory microhardness of about Hv870. Compared with conventional alumina coating, the fracture toughness and wear resistance of composite coating are increased by one and 1.5 times, respectively.