Magnetron-sputter deposition was used to produce a Ni-8Cr-3.5Al (wt.%) nanocrystalline coating on substrates of the same alloy. The oxidation behavior of the cast Ni-8Cr-3.5Al alloy and its sputtered coating were investigated at 1000 degrees C in air. Complex, layered-oxide scales composed of Cr2O3 outer layer, mixed spinel NiAl2O4 and NiCr2O4 middle layer, and alpha-Al2O3 inner layer were formed on the Ni-8Cr-3.5Al nanocrystalline coating during 200-hr oxidation, whereas Cr2O3, with some NiCr2O4 external layer with internal Al2O3,, formed on the cast alloy. Because of the formation of this alpha-Al2O3, inner layer on the coating, the sputtered Ni-8Cr-3.5Al coating showed better oxidation resistance than the cast alloy. The effect of nanocrystallization on oxide formation is discussed. It was indicated that the formation of this alpha-Al2O3 inner layer was closely related to the rapid diffusion of Al through grain boundaries in the nanocrystalline coating and the relatively high Cr content in Ni-8Cr-3.5Al.