The thermal stability of Ti1-xAlxN films deposited by arc evaporation from Ti-Al cathodes with 67 and 75 at. % aluminum, respectively, has been investigated. The microstructure of as-deposited and isothermally annealed samples were studied using scanning electron microscopy, transmission electron microscopy, and x-ray diffraction. The chemical composition and elemental distribution were determined by energy dispersive x ray (EDX), Rutherford backscattering spectrometry, and EDX mapping. Transmission electron micrographs revealed a dense and columnar microstructure in the,as-deposited condition. Films deposited from the 67 at. % cathodes were of cubic NaCl-structure phase, whereas films deposited from the 75 at. % cathodes exhibited nanocrystallites of wurzite-structure hexagonal-phase AlN in a cubic (c)-(Ti,Al)N matrix. Both films were stable during annealing at 900 degreesC/120 min with respect to phase composition and grain size. Annealing at 1100 C of films deposited from the 67 at. % cathodes resulted in phase separation of c-TiN and h-AlN, via spinodal decomposition of c-TiN and c-AlN. (Ti,Al)N films undergo extensive stress relaxation and defect annihilation at relatively high temperatures, and aspects of these microstructural transformations are discussed.