In this paper, a review of the present status of the research and technological development in the field of superhard nanocomposite coatings is attempted. Various deposition techniques have been used to prepare nanocomposite coatings. Among them, reactive magnetron sputtering is most commonly used. Nanocomposite coating design methodology and synthesis are described with emphasis on the magnetron sputtering deposition technique. Also discussed are the hardness and fracture toughness measurements of the coatings and the size effect. Superhard nanocomposite thin films are obtainable through optimal design of microstructure. So far, much attention is paid to increasing hardness, but not enough to toughness. The development of next generation superhard coatings should base on appropriate material design to achieve high hardness and at the same time high toughness.