Nanocomposite coatings demonstrate improved friction and wear responses under severe sliding conditions in extreme environments. This paper provides a review how thin film multilayers and nanocomposites result in hard, tough, low-friction coatings. Approaches to couple multilayered and nanocomposite materials with other surface engineering strategies to achieve higher levels of performance in a variety of tribological applications are also discussed. Encapsulating lubricious phases in hard nanocomposite matrices is one approach that is discussed in detail. Results from state-of-the-art “chameleon” nanocomposites that exhibit reversible adaptability to ambient humidity or temperature are presented.