The Radial Injection Gas Dynamic Spray (RIGDS) technology of powder wear resistant coatings deposition is considered. A coating is created by injection of powders with variable composition into the supersonic air jet and deposited on the substrate. Functionally graded coatings with advanced mechanical and corrosion properties were produced and tested. It is shown that operational parameters of supersonic powder-gas jet have a significant influence on the coating’s microstructure, thus defining the high performance of the coating. Compaction and bonding of particles were analyzed. Shear localization features of the GDS process are also discussed.