CrTaN coatings have recently received increasing industrial interest due to their combination of high hardness, promising fracture toughness and excellent oxidation resistance. However, up to now no thorough investigation on the thermal stability of this coating system is available. Thus, within this work, the evolution of the microstructure and phase composition of an arc evaporated CrTaN coating were illuminated in inert atmosphere up to 1400°C. The coating crystallizes in an fcc-Cr0.74Ta0.26N solid solution with a preferred <311> orientation. Alternating Cr-enriched and Ta-enriched layers are identified in the cross-section of the as-deposited coating, which arise from the three-fold rotation during deposition. In-situ high energy X-ray diffraction showed that powdered CrTaN is stable in inert atmosphere up to ∼1250°C, where fcc-CrxTa1-xN starts to transform into t-Cr1.2Ta0.8N. Upon further increasing the temperature to values exceeding 1300°C, h-Cr2N and h-Ta5N4 start to form. Vacuum annealing of a CrTaN coating on a sapphire substrate at 1000°C results in the homogenization of the synthesis-related compositional fluctuations. While still maintaining the fcc-CrxTa1-xN solid solution, a texture change to a preferred <100> orientation is observed after annealing at 1270°C. An annealing treatment at 1300°C results in the formation of t-Cr1.2Ta0.8N in addition to the fcc-Cr1-xTaxN.