Nanostructures have attracted increasing interest in modern development of hard coatings for wear‐resistant applications. In plasma‐assisted vapor deposited thin films, nanostructures can evolve during growth or a post‐deposition annealing treatment. In this review we demonstrate, using TiB2.4, TiN–TiB2, Ti0.34Al0.66N, and Ti(N,B) as model‐coatings, the development of nanostructures and its influence on the mechanical properties of ceramic thin films. For TiB2.4 and TiN–TiB2 a two‐dimensional and three‐dimensional nanostructure, respectively, organizes itself during growth by segregation driven processes. Growth of Ti0.34Al0.66N and Ti(N,B) results in the formation of a supersaturated TiN based phase, which tends to decompose into its stable constituents during post‐deposition annealing via the formation of nm‐sized domains. As the hardness of a material is determined by resistance to bond distortion and dislocation formation and motion, which depend on the amount and constitution of obstacles provided, there is a direct relation between hardness and nanostructure.