MCrAlY(M=Ni and/or Co) overlay coatings are wildly adopted on hot components in gas turbine engines to protect them from rapid oxidation. Various methods can be applied to prepare MCrAlY overlay coatings, which formed by the arc ion plating method possess outstanding properties in terms of interfacial strength, porosity and componential distribution, and thus excellent oxidation properties. To increase the Al content is deemed art economical and effective solution for enhancing the service performance and life for MCrAlY coatings at elevated temperature because the degradation process relies greatly on the ceaseless forming and spallation process of the protective alpha-Al2O3 scales during high-temperature oxidation. However, high content of Al will lower the melting point and decrease the ductility of the coating. This phenomenon can be partly resolved through a gradient coating design. In this paper, a conventional NiCrAlY coating and a gradient NiCrAlY coating have been prepared by the combined method of arc ion plating and subsequent diffusion treatment on Ni-base superalloy substrate. The microstructures, morphologies, isothermal oxidation behavior at 1000 and 1100 degrees C and cyclic oxidation behavior at 1100 degrees C have been investigated on the two kinds of the coatings. The results have revealed that the conventional NiCrAlY coating with uniform components is composed of gamma'/gamma phase, beta-NiAl phase and some alpha-Cr precipitate phase. While the gradient NiCrAlY coating have showed layered microstructure, i.e., an Al-enriched outer layer and a Cr-enriched inner layer, primarily consists of beta-NiAl phase, gamma'/gamma phase and some alpha-Cr precipitate phase in the outer layer. During the oxidation, it is evident that the vanishment of beta-NiAl phase and the enlargement of gamma'/gamma phase for both the coatings. Nevertheless, the gradient coating has maintained higher Al content during long-term oxidation due to the massive beta-NiAl phase obtained in the outer layer after vacuum annealing and the Cr(W) zones precipitated beside the Cr-enriched inner layer during the oxidation. Adequate beta-NiAl phase, as reservoir phase of Al, directly delay the process of Al depletion; Cr(W) zones, to a certain extent, slow down the degradation by hindering the diffusion of Al from the gradient coating to the substrate. As a result, the ability of forming and healing the protective alpha-Al2O3 scales in the gradient coating have been enhanced, which has eventually improved the high-temperature oxidation properties.