The concept of friction damper is widespread technique and used to reduce the structural vibrations in many industrial applications. These friction dampers are generally coated with low wear rate materials to reduce the fretting wear. This paper investigates the use of physical vapor deposition (PVD) nitride based AlTiN coating material applied over the stainless steel friction damper to enhance the damping capacity and to reduce the fretting wear. A friction test rig has been developed to measure the dynamic hysteresis characteristics of friction damper at high temperature (700 °C). The damping capacity and fretting wear analysis is carried out at room temperature, 300 °C and 600 °C. The force versus displacment characterisitcs curve is used to predict the damping capacity and fretting wear analysis is carried out at microscopic level for the comparision. It is observed that at room temperature AlTiN coated friction damper has not much influence to improve the damping capacity and to reduce the fretting-wear. However, at high temperature it has better damping capacity and less wear in comparision to uncoated friction damper. Wear behaviour in coated and uncoated damper is different at room temperature and at elevated temperature.