In this study plasma nitriding is applied on nickel–aluminum composite coating, deposited on steel substrate. Ni–Al composite layers were fabricated by electro-deposition process in Watt’s bath containing Al particles. Electrodeposited specimens were subjected to plasma atmosphere comprising of N2–20% H2, at 500°C, for 5h. The surface morphology investigated, using a scanning electron microscope (SEM) and the surface roughness was measured by use of contact method. Chemical composition was analyzed by X-ray fluorescence spectroscopy and formation of AlN phase was confirmed by X-ray diffraction. The corrosion resistance of composite coatings was measured by potentiodynamic polarization in 3.5% NaCl solution. The obtained results show that plasma nitriding process leads to an increase in microhardness and corrosion resistance, simultaneously.