The formation of the inter-diffusion layer between NiCrAlY coating and Nb substrate during vacuum heat treatment was investigated. A NiCrAlY coating was applied on Nb substrate by cathode arc deposition. Vacuum heat treatments were carried out at 800, 900, and 1000°C for 2 h. SEM, EPMA, EDS, and XRD were performed to analyze the microstructure of the inter-diffusion layer and the results were interpreted using the 1002°C isothermal ternary Nb-Ni-Cr phase diagram. It was found that at 800°C the inter-diffusion layer has a single NbNi₃ layer; at 900°C the inter-diffusion layer consists of an outer NbNi₃ layer, a thin intermediate NbCr₂(HT) layer, and an inner Nb₇Ni₆ layer; at 1000°C the interdiffusion layer has three well-developed layers of an outer NbNi₃ layer, an inner Nb₇Ni₆ layer, and an intermediate layers comprising NbCr₂(HT) and NbNi₃. A small amount of Cr exists in both the NbNi₃ and the Nb₇Ni₆ phases as solid solution, and a large amount of Ni in the NbCr₂(HT) phase as solid solution.