The ever increasing demands for high precision machining and increased cutting performance, in terms of cutting speed and lifetime, require wear resistant tools of large dimensional accuracy that have very sharp cutting edges. All these requirements cannot be fulfilled by the classic PVD and CVD technologies because they result in rather thick overlay coatings. In this report, first experiments are presented on a hybrid plasma immersed ion implantation process (PIII) for depositing thin TiN coatings on hardened and annealed high speed steel or cemented carbides. The layers were produced using a d.c.-cathodic arc source with a titanium cathode and a nitrogen feed gas. As the cathodic arc generates additional to the metal plasma, a large amount of liquid metal droplets, the plasma was guided to the samples through a 90° magnetic bending field avoiding the deposition of droplets on the samples. The obtained layer thickness was below 1 μm for deposition times of 2 min. To improve the adhesion of the deposited layers on the substrate materials, sputter cleaning by energetic ions was used during the initial phase of the process. Negative high voltage pulses in the range from zero to 5 kV have been applied to the samples during the deposition. The effect of the energy of these ions on the coating structure was also investigated by SEM, TEM and XRD. Mechanical and functional properties were investigated by hardness measurements and fretting wear tests, respectively. Finally, cutting performance tests of PIII-treated drills were performed, revealing that a 0.8-μm thick TiN PIII-coating increased the lifetime of the drills by a factor of 2.5.