Nanometerscale multilayer CrN/AlN thin films were deposited by pulsed DC magnetron sputtering. Nanoscale resolution chemistry and microstructure of CrN/AlN films with modulation periods (Λ) of 4 nm and 18 nm were studied using advanced microscopy and diffraction. At the nanometer level, the interface between the CrN and AlN nanolayers contains a concentration gradient of Al and Cr. Inter-diffusion of Cr and Al atoms into the AlN and CrN layers was identified. Microstructural characterization revealed the CrN nanolayers epitaxially stabilize the AlN layers (2 nm) to a cubic structure for the Λ = 4 nm film. The rapid repetition of the interfacial energy across the AlN nanolayers is critical for the coherent epitaxial growth. The film at Λ = 4 nm exhibited a superhardness of 42 GPa. In contrast, the AlN layers (12.5 nm) exhibited a hexagonal structure in the Λ = 18 nm film as the bulk energy becomes dominating, in which misorientated and incoherent interfaces were found. The hardness of the film dropped down to 23 GPa.