A steel piston designed to improve thermal efficiency, fuel consumption, and performance of an engine is provided. The piston includes a steel body portion and a thermal barrier layer applied to an upper combustion surface and/or a ring belt to reduce the amount of heat transferred from a combustion chamber to the body portion. The thermal barrier layer has a thermal conductivity which is lower than a thermal conductivity of the steel body portion. The thermal barrier layer typically includes a ceramic material, for example ceria, ceria stabilized zirconia, and/or a mixture of ceria stabilized zirconia and yttria stabilized zirconia in an amount of 90 to 100 wt. %, based on the total weight of the ceramic material. The thermal barrier layer can also have a gradient structure which gradually transitions from 100 wt. % of a metal bond material to 100 wt. % of the ceramic material.