In the framework of a European BRITE Project on "steered arc ion plating for the development of new ternary and quaternary ceramic coatings for cutting and forming tools", (Ti,Al)N and (Ti,Nb)N coatings were developed and optimized. The relation between bias voltage, N2 pressure and composition of the coatings was established. Coating properties such as composition, crystal structure, lattice parameter, internal stress, Young's modulus and hardness measured by nano-identation were determined. The oxidation behaviour of (Ti,Al)N and (Ti,Nb)N was investigated with Auger electron spectroscopy. The performances of industrial TiN coatings and these new ternary coatings deposited on high speed steel substrates were compared in drill tests. (Ti,Al)N made by the steered arc appears to be more oxidation resistant than TiN and (Ti,Nb)N. Laboratory wear tests and field tests indicate that the interaction between workpiece and coated tool may give important clues as to the suitability of a coating type for a particular type of workpiece material.