Abstract: Advanced surface engineering technology is often used to fabricate remanufacturing components to restore their properties close to or even better than those of new products. This paper briefly introduces the development of on-line monitoring of remanufacturing components. For the defects generated during the service process of plasma sprayed coatings, this paper summarizes the infrared detection technique, acoustic emission testing technique, and ultrasonic nondestructive testing technique which are utilized to detect the failure of coatings. In addition, on-line monitoring techniques which are applied to coatings during contact fatigue process are also overviewed. However, the above techniques only can detect the defects of failed coating components, and can not realize on-line detection of failure process. To this problem, this paper proposes a new method to detect the failure process of coating components through collecting the signals of smart materials which are embedded between the coating and substrate. Further research plan and the method to solve problems are also discussed.