Abstract: There is disclosed a process for forming aluminide diffusion coatings containing reactive elements on metal substrates such as iron, nickel or cobalt based alloys for protection against high temperature oxidation or corrosive environments. The process includes depositing a mixed metal coating containing aluminum and at least one reactive element onto the metal substrate and heat treating the coated substrate to induce interdiffusion of elements between the substrate and the deposited metal coating. In one aspect of the invention, the reactive element is yttrium and the metal coating is deposited by ion plating yttrium-aluminum by thermal evaporation from a yttrium-aluminum source. The coated substrate is heat treated between 500.degree.-1200.degree. C. to form a reactive element modified-aluminide diffusion coating having a thin outer Al.sub.2 O.sub.3 coating formed thereon.