Ceramic coatings have been investigated as tritium permeation barrier for several decades; however, there is little knowledge about irradiation effects on the coatings. In this study, yttrium oxide coatings were fabricated on reduced activation ferritic/martensitic steel substrates by radio frequency reactive magnetron sputtering, and their microstructures were investigated after iron-ion irradiation under various parameters with damage concentration of up to 20 displacement per atom. The formation of voids and an amorphous layer was confirmed in all the irradiated samples. In addition, it was found that irradiation-induced grain growth proceeded with damage concentration, and the increase of grain size was proportional to damage concentration. Furthermore, a layer with few voids formed between the crystallized and amorphous layers for the irradiated samples with higher incident energy or higher dose. Defect recovery and heat-driven grain growth and/or crystallization occurred for the sample irradiated at 500 °C, resulting in a larger average grain size than those irradiated at room temperature. Further consideration of irradiation effects to the coatings under fusion-relevant irradiation conditions is necessary.