High macroscopic residual stresses in PVD hard coatings up to about - 10 GPa are caused by both the thermoelastic effects and grown-in defects, generated by fast particles during deposition. Defect recovery, relaxation by plastic deformation or cracking limit the residual stresses. The mechanical behaviour of coated materials can be explained by the combination of the residual stresses and the exterior stresses (bending, hardness, critical load, erosion, abrasive wear). Owing to the lack of generalized knowledge about these relations a prediction of the performance of tools or components has to be sketchy.