Stainless steel grade AISI 304 is one of the most widespread modern structural material, alas its sliding wear and cavitation wear resistance are limited. Thus, AlTiN and TiAlN coatings can be deposited for increasing the resistance to wear of stainless steel components. The aim of the work was to investigate the cavitation erosion and sliding wear mechanisms of magnetron sputtered AlTiN and TiAlN coatings deposited on SS304 stainless steel. Films surface morphology and structure were examined using a profilometer, light optical microscope (LOM) and scanning electron microscope (SEM). The mechanical properties (hardness, elastic modulus) were tested by nanoindentation tester. The adhesion of deposited coatings was determined by means of the scratch test and Rockwell test. Cavitation erosion tests were performed according to ASTM G32 (vibratory apparatus) with stationary specimen procedure. Sliding wear tests were conducted using a nano-tribo testes i.e. ball-on-disc apparatus. Wear mechanisms are strongly contingent upon the structure and morphology of the tested materials. In relation to stainless steel substrate, the PVD films present a superior resistance to sliding wear and cavitation erosion. Higher resistance was noticed for AlTiN than for TiAlN film, mainly due to its superior hardness and elastic modulus. Cavitation erosion mechanism of both, AlTiN and AlTiN coatings is prone to embrittlement, imputable to fatigue processes that result in coating rupture and spallation that consist in coating fragmentation, formation of pits and finally detachment from the substrate. Additionally, films nanoindentation results measured before and after cavitation testing indicate changes in coatings structure, that acknowledged wear mechanism that starts with coating internal delamination in flake spallation mode. In contrary to PVD coatings, steel substrate is characterized by developed cavitation erosion wear with roughened surface and plastically deformed, semi-brittle, eroded surface. Sliding wear of thin films is based on micro-ploughing mechanism. For stainless steel adhesive sliding wear mode and plastic deformation with smearing, material transfer and grooving were observed. It was confirmed that various fluid machinery components made from austenitic stainless steel that undergo cavitation erosion, can be prevented by deposition of AlTiN and TiAlN films.