Today's research activities covering the field of improving the properties of cutting tools are concentrated on optimizing manufacturing technologies and tool geometry, as well as improved alloying of special cutting materials and coating of tools. Especially in the area of coated cutting inserts, high potentials to enhance wear resistance still exist. As a result of the reduced machinability of new cutting tool materials, high mechanical and thermal loads during grinding influence the subsurface properties heavily. Hence, a strong gradient of residual stress is induced in the subsurface of the tools during grinding. Even with optimized coating parameters, deposited PVD coatings fail due to insufficient subsurface properties of the substrates. In this paper, the influence of residual stress states in the subsurface layers of ground cemented carbides on the interface strength of PVD coatings is described. WC-based carbides coated by PVD-deposited (Ti,Al)N layers were used. Topics considered are the influence of grinding, microblasting, and water peening on the subsurface residual stress state of the substrate. Dependencies between stress distribution in the subsurface layers and the interface strength during application are highlighted. X-Ray measurements were carried out by using a new method for evaluating residual stress gradients in subsurface layers of cemented carbide substrates. The gradients were determined using the non-linear distribution of the diffraction angle vs, the tilt angle in units of sin(2)Psi. Depth profiles of residual stress of ground, as well as of ground and water-peened, substrates before coating the cemented carbide were determined. The results are compared with the well-known sin(2)Psi method using different lattice planes, which correspond to different penetration depths. The adhesion and wear behavior of the deposited coatings was analyzed in final cutting tests during dry machining.