The impact and fatigue resistance of overlay coatings is significantly influenced by the residual strain (or stress) field induced during coating deposition, post-treatment, and in-service loading. Optimization of the residual strain field is therefore critical to the life and performance of components. Nondestructive measurement of these strain fields in relatively thin thermal spray coatings, however, poses a challenge because conventional techniques, such as deep hole drilling, x-ray diffraction, synchrotron diffraction, and changes in beam curvature either make these techniques destructive and/or provides only a very near-surface strain measurement. This particularly complicates the strain analysis in cermet coatings, e.g., deposited by the thermal spraying process, where the low penetration depth of x-ray and synchrotron-diffraction ray can only provide a through thickness measurement of stress or strain profile via the destructive layer removal technique. Recent investigations have therefore concentrated on the use of neutron diffraction technique for such analysis, and this paper reports some of the early findings of the comparison of through thickness strain measurements in relatively thin as-sprayed and post-treated coatings via the neutron diffraction technique. Since neutrons are not charged, they do not interact with the electron cloud surrounding the atom (unlike x-ray); hence, diffraction results from the interaction with the atomic nucleus. Neutrons therefore have greater penetration depth in most engineering materials, and therefore provide a nondestructive through thickness strain measurement. Results of strain measurement are discussed with the structure property relationships and contact fatigue performance, and indicate that post-treatment of these coatings results in harmonization of the strain field within the coating, and at the coating substrate interface. This significantly influences the contact fatigue performance by improving both the cohesive and adhesive strength of these coatings.