Coatings that offer protection from wear, low friction coefficients, and corrosion resistance are required for many applications ranging from tool inserts to bearings. The precise demands placed on these coatings varies by application, but to meet new requirements a useful approach is to use established coatings in new applications or create new materials by adjusting chemistry and microstructure. To achieve significant advancements in coating properties, we must go beyond single-layer/single-phase materials. Functionally gradient, multilayer, and composite coatings permit blending of properties traditionally considered mutually exclusive; for example, hardness and toughness. To facilitate growth of these types of coatings, improved deposition techniques must be developed. Discussion in this article focuses on the development of coating materials and deposition processes at the Air Force Materials Laboratory/Materials Directorate. Materials include nitrides/ carbides and diamond-like carbon in functionally gradient, multilayer, and nanocomposite architectures. The magnetron assisted pulsed laser deposition process which permits the growth of infinitely variable gradients as well as sharp interfaces will be highlighted.