Nanocrystalline TiN (nc-TiN) has been imbedded in amorphous silicon nitride (a-SiNx) matrix to form a nanocomposite thin film (nc-TiN/a-SiNx) via magnetron sputtering. Adjusting Ti and Si3N4 target power ratio alters film composition, morphology, microstructure and residual stresses. The effects of silicon nitride target power density on surface morphology and residual stress have been studied. Atomic force microscopy (AFM) shows that the film surface becomes increasingly smoother and the roughness (Ra) drops from about 6 nm down to less than 1 nm as the silicon nitride target power density increases from 1.1 to 5.5 W cm−2. The surface topography is quantitatively described by calculation of two parameters: the interface width (w) and the lateral correlation length (ξ). The interface width (w) describes the vertical growth, and the lateral correlation length (ξ) characterizes the lateral growth of the surface. The growth-induced residual stress during the sputtering deposition of nc-TiN/a-SiNx nanocomposite thin film increases with sputtering power density, but only reaches about −1 GPa even at the highest experimented Si3N4 target power density of 5.5 W cm−2. The growth-induced stress is opposite in sign and roughly equal in quantity to the thermal stress induced by the difference in the coefficient of thermal expansion (CTE) between the films and the silicon wafer substrate. As a result, the magnetron sputtered nc-TiN/a-SiNx nanocomposite films become almost stress-free (as low as 0 to −0.15 GPa residual stress).