Dry machining will result in elevated temperatures at the tool surface (800—1000℃). So, coating materials that can provide protection for cutting tools at these temperatures are of great technological interests. ZrAlN coating is proposed to possess high-temperature stable structural and mechanical properties due to the addition of the alloying element. ZrAlN coatings were grown using a dc reactive magnetron sputtering. The XRD and nano indenter were employed to investigate the effects of reaction gas partial pressure and substrate bias on structural and mechanical properties, as well as high-temperature stability. The ZrAlN coating, when deposited under optimum conditions (-37 V substrate bias and 2×10-5 Pa N2 partial pressure), showed smooth surface with thermal stable hardness. Its internal stress was relaxed from 2.2 to 0.7 GPa after anneal- ing. Formation of Al2O3 and ZrO2 crystalline phases should be related to thermal stability of the coatings.