CrN–Ag composite films, 2.5–4 μm thick, were deposited by reactive magnetron sputtering on Si and stainless steel substrates in a 0.4 Pa pure nitrogen atmosphere at 500 °C. The layer composition was controlled by the relative power to 7.5-cm-diameter Ag and Cr targets to be 0, 3, 12, and 22 at.% Ag. The layers exhibit a dense columnar microstructure where the Ag is homogeneously distributed in the CrN matrix. The coatings were vacuum annealed for t a = 5–60 min at temperatures ranging from T a = 600–700 °C, to study the Ag-lubricant transport to the surface. Ag surface segregation during annealing is negligible for layers with 3 at.% Ag content. However, Ag diffuses to the surface of layers with ≥ 12 at.% Ag and forms particles with diameters ranging, as a function of T a and t a, from 50 to 1100 nm. Statistical analyses provide average particle sizes of 110 and 375 nm, and surface particle densities of 2 × 10 7 and 1.7 × 10 6 mm − 2 , for the 12 and 22% Ag samples, respectively. The Ag diffusive transport occurs 2–3 times faster for the 22% than for the 12% sample. We attribute the increase in Ag transport as a function of the total Ag concentration to a network of pores that form during deposition due to Ag segregation into nanometer-size pockets. The pores grow in width and connectivity as the total Ag concentration is increased, leading to a faster Ag transport at elevated Ag concentrations. Room-temperature micro-scratch tests show that the average friction coefficients and wear track depths monotonically decrease, by 27 and 56%, respectively, when the Ag concentration is increased from 0 to 22 at.%.