Nanocrystalline coatings of AISI 310S stainlesssteel with a small amount of Al were produced usingunbalanced magnetron-sputter deposition with a compositetarget. Cyclic oxidation tests were performed at 800 and 900°C in air for 100 hr. Theresults showed that AlO scalesformed on the coatings containing ~3 wt. % Al. Theoxidation rate of the coated specimens was much lowerthan that of the uncoated specimens and the scale spallationresistance was also improved significantly. Studies withatomic force microscopy (AFM) of the transient-oxidationsurfaces suggested that grain-boundary andsubgrain-boundary diffusion in the coatings may have played animportant role in promoting the formation of theAlO scale. Fast creep of thefine-grain coating and alumina scale was considered tobe the mechanism for the improvement in spallation resistance.