In this work, a novel liquid fuel HVOF process fueled with ethanol was used to prepare 75wt%Cr3C2–25wt%NiCr coatings on AISI304 stainless steel substrate. Taguchi method was employed to optimize the spray parameters (ethanol flow rate, oxygen flow rate, powder feed rate and standoff distance) to achieve better erosion resistance at 90° impact angle. The results indicated that ethanol flow rate and oxygen flow rate were identified as the highly contributing parameters on the erosion wear loss. The important sequence of the spray parameter is ethanol flow rate > oxygen flow rate > standoff distance > powder feed rate. The optimal spray parameter (OSP) for minimum erosion wear loss was obtained under ethanol flow rate of 28slph, oxygen flow rate of 420slpm, powder feed rate of 76.7 g/min and standoff distance of 300mm. The phase composition, microstructure, hardness, porosities, and the erosion wear behaviors of the coatings have been studied in detail. Besides, erosion wear testing of the optimized coating was conducted at 30°, 60° and 90° impact angle using air jet erosion testing machine. The SEM images of the erodent samples were taken to analyze the erosion mechanism.