High fracture toughness, low thermal conductivity, and thermal expansion coefficients (TECs) matching substrate are essential for thermal barrier coatings (TBCs) and abradable seal coatings (ASCs). In this work, TmNbO₄/Tm₃NbO₇ composites are designed and synthesized to boost their fracture toughness (K_IC) and thermal insulation performance. Compared with TmNbO₄ (K_IC=2.2±0.1 MPa·m^1/2) and Tm₃NbO₇ (K_IC=1.7±0.2 MPa·m^1/2), the increments in fracture toughness are as high as 50.0% and 91.1%, respectively. The highest toughness reaches 3.3±0.4 MPa·m^1/2, and it is attributed to superior combinations among grains between TmNbO₄ and Tm₃NbO₇, as well as simultaneous effects of microcracks, and cracks bridging and bifurcation. Accurate estimation of interfacial thermal resistance effect on thermal conductivity at low temperatures was achieved using the minimum interfacial thermal resistance model. A novel method is proposed to inhibit radiative heat transfer by utilizing oxides with glass-like thermal conductivity to suppress thermal radiation. Consequently, TmNbO₄/Tm₃NbO₇ composites maintain low thermal conductivity (1.19–2.02 W·m^-1·K^-1) at 1000 ºC. The high TECs (10.4~11.8×10^-6·K^-1 at 1500 °C) and the excellent high-temperature stability ensure that the designed TmNbO₄/Tm₃NbO₇ composites can be used at temperatures reaching 1500 °C. Accordingly, it is effective to achieve simultaneous enhances of fracture toughness and thermal insulation in TmNbO₄/Tm₃NbO₇ composites, and the revealed mechanisms are useful for various materials.