Protective hard coatings based on a novel nanostructured Ti0.05Al0.95N layer prepared by low pressure chemical vapour deposition were characterized with respect to their oxidation behaviour at 700 – 1150 °C in terms of phase evolution, microstructural changes, residual stress evolution and hardness. A comparison with other coatings prepared by two different physical vapour deposition methods that are in common use comprehensively demonstrated the superior oxidation resistance of the novel coating. The formation of the protective α-Al2O3 (corundum) surface layer that is held responsible for this quality could be documented with laboratory and synchrotron X-ray diffraction techniques as well as electron microscopy. Employing high resolution transmission electron microscopy a new self-organized nanoscale lamellar microstructure in the Ti0.05Al0.95N layer was discovered. Depth-resolved hardness measurements on a wedge cut into the coating by focused ion beam milling were carried out by nanoindentation and revealed an unexpectedly high hardness of the highly Al-rich layer that can be explained by the aforementioned microstructure. Finally, synchrotron X-ray diffraction showed no particularly strong preferred orientation in the coating and depth-resolved residual stress profile evaluation evidenced a complex graded compressive stress state that partly relaxes due to phase decomposition after high temperature oxidation.