WC–17Co nanostructured coating was prepared by means of air plasma spraying technology. Microstructures and compositions of the nano WC–Co powder and coating were analyzed using SEM (Scanning Electron Microscopy), and XRD (X-ray Diffraction), etc. The average grain size of the coating was measured using XRD. The mechanism of nanostructure formation and the properties of the nanostructured coating were investigated. The results show that the size of original particles is about 50–500 nm. Finer sub-particles of 2–5 nm are found to exist in the original particles. These sub-particles can act as crystallization nuclei and make the grains much finer during the plasma spraying process, which is beneficial to the formation of nanostructure in the coating. Both amorphous and nanostructured phases can be identified in the coating. The nanostructured coating is mainly composed of WC, W 2C and some amorphous phases. The nanostructured WC–Co coating has a good mechanical property combination. Nanostructured coating possesses good combination properties of micro-hardness, fracture toughness and bonding strength.