Abstract: Controlled Atmosphere Plasma Spraying (CAPS) constructs plasma jets with high specific enthalpy and high momentum flux under controlled-pressure atmospheres, which can markedly suppress in-flight particle oxidation and the formation of oxide inclusions, and thus provides an important route for the fabrication of coatings with high density, high purity, and high interfacial bonding strength. In this paper, the research progress on the multiscale physical processes involved under low-pressure/controlled-atmosphere conditions is systematically reviewed, with emphasis on three main themes: the temperature and velocity fields of plasma jets and their compressible expansion characteristics; heat, mass, and momentum transfer of powder particles within the plasma jet; and the spreading–solidification behavior after particle impact, lamellar microstructural evolution, and the formation mechanisms of pores and residual stresses. Under low-pressure conditions, the strong expansion of the plasma jet, together with the accompanying non-equilibrium and rarefaction effects, significantly alters the boundary conditions for heat and momentum transfer, making particle heating, melting, evaporation, and acceleration highly sensitive to process variables such as power, chamber pressure, and gas composition. During deposition, interfacial wetting and real contact, the competition between spreading and solidification timescales, and successive droplet impingement and reheating collectively govern the coupled evolution of lamellar microstructure, pore structure, and stress state. Furthermore, the intrinsic relationship among pore formation, stress accumulation, and microstructural densification under continuous multiparticle deposition is discussed. Finally, from the perspective of coupling physical mechanisms with process regulation, it is proposed that achieving highly dense and highly consistent coatings by CAPS still requires major advances in multiscale state-parameter characterization, mechanism-driven modeling, and closed-loop control.