Electroless Ni-P coatings were deposited on mild steel substrates and the effect of heat-treatment on their structure and tensile behaviour was studied, with the following conclusions. The as-deposited electroless Ni-P coating is amorphous and it remains amorphous up to 300 degrees C. At 400 degrees C the coating becomes crystalline and consists of a Ni3P matrix containing areas of metallic nickel. For the selected coating/substrate thickness ratio, the contribution of the coating in the tensile properties of the coating-substrate system is negligible as expressed by the values of yield strength, ultimate tensile strength and fracture strain in mild steel substrates and coated as-deposited and heat-treated specimens. Extensive cracking of the coating accompanied by spalling was occurred during the tensile tests. The density of cracks was found to increase close to the fracture surface of the tensile specimen and with increasing heat-treatment temperature. The cracks observed on the surface of the coatings are believed to form due to the inability of the brittle coating to accommodate the strain generated in the ductile substrate. Their orientation to the tensile axis is in close relation to the structure of the coating and the failure mechanism that is dictated by this structure. The first cracks on the surface of the coatings were found to form after the yield strength of the tensile specimen has been reached and plastic deformation of the substrate takes place. Their density increases with the accumulation of strain up to fracture.