The relation of microstructure and mechanical property in cathodic arc evaporated (CAE) Cr33Al67N coatings have not yet been fully understood despite their extensive applications. In this work, we prepared Cr33Al67N coatings using CAE, a more industrially favored technique. The as-deposited coatings show superhardness (41 GPa), superior fracture resistance, adhesion strength and high compressive stress (6.3 GPa). Phase and bonding analyses show that the coatings comprise single fcc-solid solution structure with (111) orientation. Transmission electron microscope investigation revealed a microstructure evolution of the coatings: columnar grains with a diameter of 20–40 nm ripen from nano-composite structure with grain diameter of about 6 nm. The resulting densification of grain boundary (GB) facilitates growth of compressive stress, confirming the GB adatom pinning mechanism. Compressive stress plays a significant role in the concomitant hardening and toughening of the coatings by impeding grain boundary glide. Hall-Petch effect and low-angle grain boundary also contribute to the hardening-toughening. These findings reveal the relation of structural mechanism between hardening and toughening in PVD nitride coatings, and supplement the measures to tune microstructure towards superhard yet tough coatings. Display omitted •Cr33Al67N coatings fabricated by cathodic arc evaporation are solid solutions.•The coatings have high hardness and toughness, as well as compressive stress.•High compressive stress facilitates the formation of low-angle grain boundaries and (111) orientation.•Compressive stress and low-angle grain boundary jointly contribute to the combination of high hardness and toughness.