In this work, TiC-Cr overlay formed by plasma transferred arc alloying was subjected to tempering treatment at 473, 673, and 873 K for 2 h, respectively. XRD was employed to investigate phase transformation, determine the austenite proportion and evaluate the crystallite size. Microstructure investigation by SEM and TEM, microhardness and fatigue test were performed on as-deposited condition and after tempering. Evolution of microstructure as well as its relationship with microhardness and fatigue property of coating was described. The results suggest that both microhardness and fatigue strength could be improved by tempering at 473 K; however, further elevation of the temperature directs degradation. Based on the Weibull distribution, tempering treatment increases the slope of fitting line, which suggests that fatigue life becomes more predictable.