Grain oriented electrical steels (GOES) are coated with aluminium orthophosphate on top of a forsterite (Mg2SiO4) layer to provide stress and insulation resistance to reduce the power loss and magnetostriction. In this work Chromium Aluminium Nitride (CrAlN) was coated on GOES samples with electron beam physical vapour deposition and was tested in the single strip and magnetostriction tester to measure the power loss and magnetostriction before and after coating. Power loss was reduced by 2% after coating and 6 % post annealing at 800 °C. For applied compressive stress of 6 MPa, the magnetostrictive strain was zero with the CrAlN coating as compared to 22 and 24 μϵ for fully finished GOES and GOES without phosphate coating. The thickness of the coating was found to be 1.9 ± 0.2 μm estimated with Glow Discharge Optical Emission Spectroscopy (GDOES). The magnetic domain imaging showed domain narrowing after coating. The reduction in power loss and magnetostriction was due to the large residual compressive stress and Young’s modulus (270 GPa) of the coating.