cBN/NiCrAl nanocomposite coating was deposited by cold spraying using mechanically alloyed composite powders. To examine the thermal stability of coating microstructure, the nanocomposite coating was annealed at different temperatures from 750 to 1000°C. The microstructure of composite coatings was characterized by X-ray diffraction, scanning electron microscopy and transmission electron microscopy. The results showed that the nanostructure was retained in the coating when the annealing temperature was lower than 825°C which is 0.7 times of the melting point of NiCrAl matrix. The dislocation density significantly reduced when annealing temperature was higher than 750°C. The cBN particle growth became significant when the annealing temperature was higher than 825°C. The effects of crystal grain refinement and work-hardening strengthening mechanisms were quantitatively estimated as the function of annealing temperature. The effect of annealing temperature on the contribution of different strengthening mechanisms to coating hardness was discussed.