The role of negative substrate bias voltage in influencing the microstructural evolution, along with the mechanical and scratch behavior of magnetron sputtered Ni–Zr alloyed thin films, has been investigated. The films have been deposited on a Si(100) substrate by direct current (DC) magnetron co-sputtering of high-purity elemental Ni and Zr targets, using an optimized target power in an argon atmosphere at room temperature by altering the negative substrate bias voltage (0 to −80 V). The increase in negative substrate bias voltages leads to an increase in Zr content of the investigated films. The characterization techniques such as grazing incidence X-ray diffraction and high-resolution transmission electron microscopy studies confirm that an increase in the negative substrate bias voltage leads to an increase in the volume fractions of amorphous phase and Ni3Zr, but a decrease in the deposition rate, surface roughness, and average grain sizes. Hardness and Young's modulus obtained by nanoindentation, along with the coefficient of friction obtained from nano-scratch experiments, appear to be related to the relative volume fractions of both nanocrystalline and the amorphous phase. Furthermore, increase in Ni3Zr volume fraction with decrease in grain size within the crystalline part of the film, with increase in substrate bias used during deposition may have contributed to both increase in both hardness and scratch resistance.