MoS2/Zr composite coatings were deposited onto M2 high speed steel tools by medium-frequency magnetron sputtered coupled with multi-arc ion plated techniques. The thickness, micro-hardness and coating-substrate adhesion strength of the coatings were studied. Surface morphologies of the as-deposited coatings as well as wear surface features after dry machining tests were investigated. The experimental results indicated that deposition of PVD MoS2/Zr composite coatings onto M2 HSS tools shows higher hardness compared to the pure MoS2 coatings, and exhibits significant enhancement in cutting performance. The wear mechanism of the MoS2/Zr coated tools is mainly delamination of the coating owing to the elevated cutting temperature and friction force.