The work aims to monitor the parallel cracks in thermal barrier coatings. For the thermal barrier coating prepared by atmospheric plasma spraying method, two kinds of cracks with different sizes were prefabricated. The time domain spectrum was obtained by the reflective Terahertz time-domain spectroscopy system, and the Hanning window function-wavelet noise reduction filtering method was used to carry out reverse-convolution to extract the featured time interval between different reflection peaks and establish mathematical models for crack dimension parameters estimation. The terahertz time-domain spectroscopy could effectively measure the D thickness of ceramic coatings without parallel cracks. For the parallel cracks with different sizes, the pre-made distance d1 between the upper surface of the crack and the top surface of ceramic coatings could be estimated by extracting the time interval Δt1 between the 1st reflection peak and the 2nd reflection peak, and it could be used to determine the location type of the crack. When d1 was smaller than D, the crack was an internal parallel crack, and when d1 was approximately equal to D, the crack was an interface parallel crack. For the larger crack with width of 130 μm, the error caused by the time interval Δt2 between the 2nd reflection peak and the 3rd reflection peak in the calculation of D was still within a reasonable range, which was about 16.47%. For the smaller crack with width of 80 μm, the error was 41.10%. The characteristic time interval Δta of the secondary reflection inside the crack which was effectively extracted by Hanning window function-wavelet noise reduction filtering method was used for the crack width estimation, and the error of the cracks with larger and smaller width was significantly reduced, respectively 4.61% and 10.01%. The experimental results showed that reverse-convolution could effectively reduce the estimation error ΔD and provide a possibility for detecting crack of narrower width. Thermal barrier coatings evaluation technology based on Terahertz time-domain spectroscopy system provides a non-contact, low-emission, on-line and non-destructive parallel cracks monitoring method, which can effectively identify and monitor the thermal crack coating interface and internal parallel cracks.