CrAlYN hard coatings with two different average Al contents: similar to 16 at.% and similar to 25 at.%, and Y concentration varying between 1.2 and 5.7 at.% were deposited by direct current reactive magnetron co-sputtering of mixed Cr-Al and Y targets on commercial M2 steel substrates. The samples were heated to 1000 degrees C in air during 2 h to study their oxidation resistance and thermal stability. The Y content is critical and the coatings present different behaviour depending on the Al content. The best oxidation resistance and thermal stability are obtained for the coating with similar to 16 at.% Al and 3.4 at.% Y. The initial film microstructure and the cubic phase (fcc-CrAlN) were retained, and a thin (Cr,Al)(2)O-3 oxide protective scale was formed. At lower Y content (1.2 at.%) iron, from the substrate crosses the coating, while a higher content (4.6 at.%) avoided the iron diffusion at the expense of a thicker oxide scale with new oxide phases. The coatings with higher Al content (similar to 25 at. %) were not thermally stable at 1000 degrees C. A good oxidation resistance was obtained for 2.6 at.% of Y although new phases (hcp-AlN and Cr-Fe) were formed. Higher amount of yttrium (similar to 5.7 at. %) led to the complete oxidation of the coating.