Diamond-like carbon (DLC) films were deposited on various substrates using direct ion beam deposition from an RF IC hydrocarbon plasma source. Combinations of gases such as CH4. CH4–N2 were used to form plasma. The mechanical, electrical and optical properties of the films were examined as a function of deposition conditions and N2 content in gas mixture. A small amount of N2 (<8 sccm) did not markedly change hardness and stress, while electrical conductivity was significantly increased. In addition, a small amount of N2 improved wear performance of the films reducing amount of debris and wear track size. Introduction of high N2 flow into the system significantly deteriorates value of these parameters. It was found that N2 essentially increases absorption coefficient, and reduces optical band gap. Analysis of the experimental results shows that observed effects can be explained by incorporation of N2 into carbon-strained network that induces structural changes and. in turn, leads to an increase of sp2 fraction in the DLC films.