TiAlN is one of the most widely used physical vapour deposition (PVD) coatings in the manufacturing industry. Naturally, the performance of this coating is dependent on its properties, which can be tuned and optimized according to the application. Residual stress is one of the properties which affects hardness, fracture toughness, and adhesion of the coating. Although it is difficult to make a general recommendation for desirable residual stress values, individual recommendations can be made based on a specific workpiece material and tool wear mechanism. In this regard, adhesion wear and the formation of built-up edge were identified as the dominant wear mechanism during dry turning of compacted graphite iron and a coating's residual stress should be adjusted to minimize the damage from adhesion wear. Therefore, the present work investigates cutting performance and related coating properties of multilayer thick TiAlN coatings with different residual stress designs. For this purpose, residual stress was adjusted by varying the substrate bias voltage during the deposition process. The effect of residual stress on properties such as hardness, yield strength, and adhesion were studied by nanoindentation and scratch tests. Moreover, the dominant wear pattern, especially on the rake face and cutting edge, was thoroughly studied using a scanning electron microscope (SEM). The results showed increased mechanical properties such as hardness and yield strength with higher substrate bias voltages and therefore higher residual stresses. However, the coating with the lowest compressive residual stress outperformed the other coatings during machining due to a combination of high adhesion to the substrate and low as-deposited defects which effectively delayed cutting-edge exposure. •Residual stress of thick multilayer TiAlN coating is varied by adjusting bias voltage combination in a range of 1–5 GPa.•By increasing compressive residual stress of the coating hardness and yield stress increase and adhesion reduces.•With higher residual stress in the coating, higher as-deposited defects are present on the cutting edge.•Coatings performance is significantly improved with low compressive residual stress.