In the present investigation Ni–ZrO2 metal matrix composite coatings were prepared on steel substrate using watt’s type solution through electro-co-deposition process with different weight percentages of zirconia powder dispersed in the bath. In the coating, nickel is present with faceted appearance along with ZrO2. The microhardness and wear resistance of the coatings increase with increasing weight percentage of particles content in the coating. The hardness of the resultant coatings was found to be 325 VHN for pure Ni coating whereas 401VHN for Ni–ZrO2 (15 g/l ZrO2) coating depending on the particle volume in the Ni matrix. The results also showed that the wear resistance of the composite coatings was improved as compared to unreinforced Ni deposited material. Strengthening of the coating was attributed to the ZrO2 dispersion and partially favorable texture.