Zirconium-based alloys have served the nuclear industry for several decades due to their acceptable properties for nuclear cores of light water reactors (LWRs). However, severe accidents in LWRs have directed research and development of accident tolerant fuel (ATF) concepts that aim to improve nuclear fuel safety during normal operation, operational transients and possible accident scenarios. This review introduces the latest results in the development of protective coatings for ATF claddings based on Zr alloys, involving their behavior under normal and accident conditions in LWRs. Great attention has been paid to the protection and oxidation mechanisms of coated claddings, as well as to the mutual interdiffusion between coatings and zirconium alloys. An overview of recent developments in barrier coatings is introduced, and possible barrier layers and structure designs for suppressing mutual diffusion are proposed.