MCrAlY coatings possess important role on the performance of turbine engines. Their main application is resistance to high temperature oxidation. Although the oxidation mechanism of these coatings were studied by other researchers, there is lack of published papers on the early stage of this phenomenon. In this project, the effect of surface splats produced during HVOF process on early stage oxidation mechanism of the CoNiCrAlY coating was studied in terms of both oxidation time and adhesion characteristics of splats to the coating surface. The experimental results showed that in the first oxidation moments, the oxide layer which forms on the splats is composed of significant amount of heavy metals (Ni, Co and Cr). By gradual aluminum diffusion to the coating surface, a rich aluminum oxide is replaced by the heavy element oxides. Diffusion of Al to the surface of coating over time in addition to increasing the thickness of oxide layer could also cause depletion of β phase from splats surface. These two resulted in the formation of crack in the coating and local oxide growth (spinel oxide in nodular shape), respectively. Consequently, the oxidation rate of areas covered by splats was much higher than the coating surface areas without splats due to high ratio of surface area to volume of splats and limited aluminum reservoir in the splats (specially for splats with poor bonding to the surface).