Nanocrystalline TiAlN coatings were prepared by reactively sputtering TiAl metal target with $N_2$ gas. This was done using a magnetron sputtering system operated in DC and ICP (inductively coupled plasma) conditions at various power levels. The effect of ICP power (from 0 to 300 W) on the coating microstructure, corrosion and mechanical properties were systematically investigated using FE-SEM, AFM and nanoindentation. The results show that ICP power has a significant influence on coating microstructure and mechanical properties of TiAlN coatings. With increasing ICP power, the coating microstructure evolved from the columnar structure typical of DC sputtering processes to a highly dense one. Average grain size of TiAlN coatings decreased from 15.6 to 5.9 nm with increasing ICP power. The maximum nano-hardness (67.9 GPa) was obtained for the coatings deposited at 300 W of ICP power. The smoothest surface morphology (Ra roughness 5.1 nm) was obtained for the TiAlN coating sputtered at 300 W ICP power.