An advanced AlCrSiN/AlCrN/CrN/Cr multilayer coating was developed via hybrid multiarc ion plating and high-power impulse magnetron sputtering. The multilayer design enhanced the substrate–coating compatibility, achieving a critical load of 87.8 N. Silicon doping induced nanocrystallization and amorphization, increasing the hardness to 26 GPa. At high temperatures, a nanoscale Cr-rich (Cr,Al)₂O₃ layer was formed, effectively inhibiting oxygen diffusion. The coating underwent unique phase transformations, during which Cr₂N and amorphous Si₃N₄ were converted into dispersed SiCr₃ nanoparticles, which stabilized Cr atoms and suppressed their outward diffusion. Ab initio molecular dynamics simulations revealed that Cr atoms exhibited higher chemical activity and oxygen-capture capability than Al atoms and Si atoms served as diffusion barriers by pinning onto the oxidized surface, considerably improving the oxidation resistance of the coating.