Crack formation in hard thin films and the influence of nanostructuring on nucleation and propagation of different crack types were studied using TiAlSiN-based multicomponent nitrides. Thin films of about 2 μm thickness were deposited onto tungsten carbide-cobalt substrates using cathodic arc PVD method. By rotation of samples and changing deposition parameters and chemical composition of target materials, various nanostructured thin films were obtained including: nanocomposite films made of nanocrystallites about 10–30 nm, chemically modulated layers with the bilayer thickness at the range of 10 nm, iso-structured TiAlN/TiAlSiN multilayers with variable bilayer thickness, and finally monolithic single layer with columnar structures of different size. Depth sensing nanoindentation was used to measure hardness and modulus of thin films and to activate several failure modes in order to provide an estimation of the fracture toughness and interfacial fracture energies. Morphology of cracks mainly consist of successive microcracks nucleated at the contact edge periodically under stretching tensile stress upon displacement of indenter. These cracks are almost straight, parallel to each other, regularly distributed at the contact site in fine structure films. They appear discontinuous and irregular in coarse columnar monolithic and in multilyers with larger bilayer periods. The annular cracks appear at greater loads due to tensile peaks caused by bending stresses generated from the substrate depression and coating deflection. These can be accompanied by the interface fracture and delamination. The radial cracks emanating from the corner of indenter appear in high stress films and extend to the neighbouring zones of the contact area. In addition to geometrical cracks, nanoscale cracks frequently appear around the contact area leading to the formation of small discontinuities on the load-displacement curves.