The oxidation behaviour of TiAlN based hard coatings with the addition of Cr and/or Y was investigated using scanning electron microscopy, scanning/transmission electron microscopy, energy dispersive X-ray analysis, thermogravimetry and X-ray diffraction. The coatings were deposited using the combined cathodic arc/unbalanced magnetron deposition technique. The main practical application of these films is dry high speed cutting in difficult to cut materials such as AISI A2 steel. Especially in the case of TiAlCrYN coating with an oxynitride and Cr-enriched overcoat, extensive research on the oxidation behaviour was performed and described here. Heat treatments in air between 600-1000°C for different duration were carried out. The Ti[0.44]Al[0.54]Cr[0.02]N coating was used as the starting point for the investigations. The effect of heat on the composition of the interface region was investigated. This region is of utmost importance for the adhesion of the film. In the case of TiAICrN the interface stability was not guaranteed because of diffusion of the substrate elements Cr and Fe to the coating surface after annealing for 1h at 900°C. In comparison, the diffusion of substrate elements Cr and Fe in a ~2.3 mum thick coating of Ti[0.43]Al[0.52]Cr[0.03]Y[0.02]N and of Ti[0.34]Al[0.62]Cr[0.03]Y[0.01]N with overcoat, reached only a distance of ~600nm into the coating. This was achieved by the diffusion of Y to the grain boundaries. Y probably reacted at the same time with inward diffusing O. The diffusion of Y to the boundaries was observed after heat treatment for 1h at 900°C or 10h at 800°C.Ti[0.26]Al[0.26]N/Cr[0.48]N was the coating with the least oxide layer growth after oxidation for 1h at 900°C. An oxide layer thickness of only ~100nm was measured. For the TiAICrYN coating with overcoat an oxide layer of 230nm and for TiAICrYN of 430nm formed after 1h at 900°C. TiAlCrN in comparison formed an oxide layer of ~800nm after 1 h at 900°C.The oxide layers formed after 1h at 900°C consisted mainly of an Al[2]O[3] and TiO[2] bi-layer in the case of TiAlCrN and TiAlCrYN. The addition of a Cr-rich oxynitride overcoat led to the formation of a mixture out of Al[2]O[3], Cr[2]O[3] and TiO[2] in the oxide layer. In the case of TiAlN/CrN, a solid solution consisting of Cr[2]O[3] and Al[2]O[3] was observed. In general a stress relief after heat treatment was observed. At the same time the formation of voids along the column boundaries was identified. This was explained with the relaxation and diffusion of defects created during the deposition process. The effect of different substrate materials on the oxidation behaviour was also investigated. It was found that the formation of substrate oxides on the coating surface is very much dependent on the onset point of oxidation of the substrate material itself. The oxidation of substrate material occurred mainly through growth defects and pinholes. In cases where cracks formed during heat treatment of the coating, the formation of oxides out of substrate elements were observed in cracks connecting the substrate with the coating surface. Changing the bias voltage altered the formation of cracks. This research emphasises the importance of Y in the oxidation mechanism of TiAlN based hard coatings. Y blocks the diffusion path along the column boundaries and thus stowed down the diffusion and oxidation process. At the same time the addition of Cr can increase the oxidation resistance considerably, which was observed in the TiAlCrYN coating with and without overcoat.