Buried pipelines are protected from external corrosion attack by coating and cathodic protection (CP). When the pipeline is adjacent to the high-voltage power transmission lines it would experienceaccelerated corrosion and reduced CP effectiveness due to the alternating current (AC) interference. There have been extensive works conducted to study AC corrosion of pipelines and the new CP design. However there has been limited work to investigate the effect of AC on coating properties and its performance degradation.In this work the effect of AC on the properties and performance of a fusion bonded epoxy (FBE) coating was studied in a simulated soil solution. Fourier Transform-Infrared Spectroscopy (FT-IR) was used to characterize the structures of the coating that is under various AC current densities. At the same time the water uptaking ionic permeation adhesion and corrosion resistance of the coating upon AC applicationwere studied by a combination of surface analysis techniques such as scanning electron microscope and atomic force microscope and electrochemical impedance measurements. It is anticipated that a complete understanding of the effect of AC interference on coating performance and thus the pipeline corrosion protection is developed.