Circumferential guided wave propagation behavior in a viscoelastic multi-layered hollow cylinder is studied to provide a baseline for defect detection in tar coated pipelines. Theoretical work was carried out by developing the appropriate dispersion curves and wave structures for circumferential guided waves in a pipe coated with a viscoelastic material. Parameters that affect wave attenuation were investigated with some initial guidelines being established for improved penetration power. Low frequencies are suggested from both attenuation and detection depth points of view. Under this guidance, experiments utilizing a linear transducer array were conducted at a low frequency for successfully detecting delamination and volumetric defects in tar coated pipe. A study was carried out to find the appropriate features for defect detection in coated pipe and a test protocol based on this study is recommended and summarized.