As the dimensions of materials are reduced to the nanometer scale, the stabilization of pseudomorphic crystal structures that differ from their bulk equilibrium phases can occur. The pseudomorphic growth could provide a substantially larger bulk modulus and greater hardness than the average of the constituent materials in nanolayered and nanocomposite thin films. To evaluate this effect in Ti1-xAl x N system, a series of nanostructured films with × up to 0.7 were deposited onto WC-Co substrates using arc PVD, and characterised in terms of structure-property relations. Chemical composition by RBS together with HRTEM and XRD analysis showed that for the Al content below × = 0.4 a solid solution single-phase film is formed, while for × values beyond 0.5 mixed structures made of fcc-TiN and hcp-AlN, or nanocomposite films made of fcc-TiN, hcp-AlN, and fcc-AlN appeared depending on deposition conditions. Hardness of solid solution films was found to increase almost linearly with the Al content, while two opposite behaviours were distinguished for composite structures. Hardness rapidly decreased according to the rule of mixture as soon as solid solution phase began to separate into TiN and AlN growing in their natural structures with misfit dislocation at the interface. In contrast, further hardness enhancement was measured when nanocomposites with coherent interfaces were formed due to pseudomorphic stabilization of fcc-AlN on fcc-TiN crystallites.