Abstract Structure and stability of vacuum arc-deposited Ti 1− x Al x Si y N hard coatings were studied before and after thermal treatment. Substituting titanium by aluminium and silicon results in a structure refinement in these multicomponent coatings through different mechanisms. Adding small amounts of Al+Si into TiN at first increases the hardness due to solid solution hardening. When the (Al+Si)/Ti atomic ratio reaches about 0.8, a phase separation into two cubic phases, Ti 1− x Al x N and zinc-blende AlN, occurs and the nanohardness drops. At an even higher (Al+Si)/Ti ratio of 1.3, the hexagonal wurtzite-type AlN phase begins to be formed as well, while the hardness does not decrease any more. This AlN phase segregation may be promoted by the increasing thickness of (Al+Si)-rich nitride nanolayers observed by transmission electron microscopy (TEM). After thermal treatment of the samples for 1 h at 1000 °C under nitrogen, a significant hardness drop due to structural relaxation occurs for single-phase low-(Al+Si) coatings, indicating that the initial hardening effect was due mainly to compressive stresses in the films, caused by the ion bombardment conditions during deposition. For films of higher aluminium and silicon content this response is reversed and a hardness increase of about 2 GPa is measured. Since the nanolayer structures remain unaffected by the annealing according to TEM this behaviour evidently relates to the presence of a Ti 1− x Al x N/SiN y nanocomposite, where the hardness increase is attributed to spinodal segregation completion during annealing. The oxidation rate during annealing depends on film composition and microstructure. The oxide layer formed on the top of the (Al+Si)-rich coatings consists of nano-grained Al 2O 3 at the oxide-coating interface, followed by a layer of discrete TiO 2 and Al 2O 3 in the near-surface region. TEM revealed a non-uniform oxide-coating interface for columnar coatings, with preferential oxidation along the grain boundaries.