AlTiN and AlTiN-Cu coatings were deposited on cemented carbide substrates with cathodic arc ion plating. The properties of coatings were studied by X-ray diffractometry (XRD), scanning electron microscopy(SEM), energy dispersive X-ray spectroscopy(EDX), X-ray photoelectron spectroscopy(XPS), nanoindentation and cutting tests. The results show that AlTiN coating is typical columnar structure, Cu changes the grain growth way and preferred orientation, refines the grain sizes of the coating and reduces the coating hardness. AlTiN layer and AlTiN-Cu layer applied on the indexable inserts were compared in cutting tests. The AlTiN-Cu coatings cutting life is improved by 44% under conditions of dry cutting, which is caused by the effect of the lubrication of copper. Whereas, the AlTiN coatings are more successful at wet cutting, it can be attributed to the addition of Cu decreases the hardness of the coatings.