Friction reduction of AlTiN-based hard coatings is gaining much attention among researchers worldwide to broaden their tribological applications. Metal/non-metal inclusions, as well as the design of a novel coating architecture, are primarily focused on reducing friction while retaining wear resistance. This study investigates the tribological characteristics of magnetron sputtered AlTiN coatings by incorporating amorphous carbon (a–C) at different concentrations (5–25 at.%), as well as the compositionally graded AlTiN/a-C coatings (CGC). The XPS and Raman spectroscopy results confirm the presence of a-C features, while XRD reveals the formation of ceramic carbide phases in AlTiN coatings with higher carbon content and CGC coatings. The CGC AlTiN/a-C have shown a maximum hardness of 34.3 GPa and an elastic modulus of 321 GPa due to their refined grain structure. The CGC had the lowest friction (0.18 at 300 K and 0.37 at 673 K), as well as improved wear resistance (2.74 × 10^{- 7} mm3/Nm (300 K) and 4.93 × 10^{- 7} mm3/Nm (673 K)). The tribolayers are found to be mainly composed of sp²/sp³ bonded a-C features (including C=C/C─C, C─N, and C─O), which reduces the friction force significantly. The CGC AlTiN/a-C coating has exhibited improved wear resistance behavior due to their finely grained structure and improved mechanical properties.