The influence of dry particle coating on the properties of coatings produced by d.c. arc plasma spraying is reported. A mechanofusion process is used to coat coarser metallic particles with fine ceramic particles without using either binders or solvents. The key parameters affecting the mechanofusion process and the corresponding plasma spraying method have been varied in order to increase the hardness of the resulting composite coatings. Efforts have been made to disperse homogeneously hard particles (α-Al2O3, SiC) into a metallic matrix (316L stainless steel) and check if it is possible to limit the oxidation of metallic particles during their flight in the plasma jet flowing in air. The hardness of resulting composite coatings depends on the metallic particle size even when the hard ceramic particles are homogenously dispersed into the metallic matrix. Spraying mechanofused powder composed of finer stainless steel particles (64 ,m), results in finer structured deposits that show a higher oxide content. On the contrary, a low oxidation rate of the metallic matrix is observed when coarser metallic particles (120 ,m), covered by a binary layer of α-Al2O3 and SiC are sprayed.