A dense phase powder coating system includes a powder supply, dense phase pump, a spray gun and a diverter valve that can be used to select between conveying powder to the spray gun or circulating the powder back to the powder supply. The diverter valve may include two pneumatically actuate valve members. In one embodiment, the powder spray gun applies powder coating material to inside surfaces of a tubular container. A spray nozzle concept also is presented having a nozzle body with a conical deflector. The spray nozzle provides an uninterrupted flow between spray nozzle outlet holes and a deflector surface. The deflector may be integrally machined with the nozzle body to provide a one piece spray nozzle.