Abstract Machining of hard to cut materials such as hardened steels and high temperature strong aerospace materials is a challenge of modern manufacturing. Two categories of the aluminum-rich TiAlN-based Physical Vapor Deposited (PVD) coatings, namely AlTiN and TiAlCrN, are commonly used for this area of application. A comparative investigation of the structural characteristics, various micro-mechanical properties, oxidation resistance and service properties of the both coatings has been performed. Crystal structure has been studied using High Resolution Transmission Electron Microscopy (HR TEM). Electronic structure has been investigated using X-ray Photoelectron Spectroscopy (XPS). Micro-mechanical properties (microhardness, plasticity index, impact fatigue fracture resistance) have been evaluated using a Micro Materials Nano-Test System. Short-term oxidation resistance has been studied at 900 °C in air. The tool life of the coating was studied during ball nose end milling of hardened H 13 tool steel as well as end milling of aerospace alloys such as Ni-based superalloy (Waspalloy) and Ti alloy (TiAl6V4). It was shown that the set of characteristics that control wear performance strongly depend on specific applications. For machining of hardened tool steels, when heavy loads/high temperatures control wear behavior, the coating has to possess a well-known combination of high hot hardness and improved oxidation resistance at elevated temperatures. To achieve these properties, crystal structure for TiAlN-based coatings should be mainly B1, and elemental composition of the coating should ensure formation of strong inter-atomic bonds such as Al–Cr metal-covalent bonds in the TiAlCrN coating. Nano-crystalline structure with grain size of around 10–30 nm enhances necessary properties of the coating. In contrast, for machining of aerospace alloys, when elevated load/temperature combined with intensive adhesive interaction with workpiece material results in unstable attrition wear with deep surface damage, the coating should possess a different set of characteristics. Crystal structure for TiAlN-based coatings is basically B1; but due to a high amount of aluminum, the AlTiN coating contains AlN domains. The coating has a very fine-grained nano-crystalline structure (grains sized around 5 nm). Electron structure of energy levels indicates formation of metallic bonds. This results in plasticity increase at the cost of hot hardness reduction. The surface is able to dissipate energy by means of plastic deformation (instead of crack formation) and in this way, surface damage is reduced.