We have deposited TiAlN coatings on high-speed steel (HSS) drill bits, silicon and mild steel substrates using a four-cathode reactive direct current (DC) unbalanced magnetron sputtering system. Asymmetric bipolar-pulsed DC generators have been used to deposit TiAlN coatings from the reactive sputtering of Ti and Al targets in N2 þ Ar plasma. Various treatments have been given to the substrates for improved adhesion of the TiAlN coatings. The process parameters have been optimized to achieve highly adherent good quality TiAlN coatings. These coatings have been characterized using X-ray diffraction, scanning electron microscopy, energy-dispersive X-ray analysis, X-ray photoelectron spectroscopy, nanoindentation, atomic force microscopy, wear tester, potentiodynamic polarization techniques. The performance of the TiAlN coated HSS drill bits is evaluated by drilling a 13-mm thick 304 stainless steel plate, which is considered to be difficult to machine material. The performance evaluation tests have been carried out with and without coolant. The results show significant improvement in the performance of the TiAlN coated HSS drill bits. Furthermore, it has been shown that dry drilling of 304 stainless steel plate is possible with TiAlN coated HSS drill bits. Improvement in the performance of TiAlN coated tools has been attributed to excellent high temperature oxidation resistance and corrosion resistance of TiAlN coatings.