Abstract: The present invention describes a coated substrate material. The coating is formed by one or more layers of refractory compounds of which at least one layer of fine-grained, crystalline &ggr;-phase alumina, Al2O3, with a grainsize less than 0.1 &mgr;m. The Al2O3layer is deposited with a bipolar pulsed DMS technique (Dual Magnetron Sputtering) at substrate temperatures in the range 450° C. to 700° C., preferably 550° C. to 650° C., depending on the particular substrate material. Identification of the &ggr;-phase alumina is made by X-ray diffraction. Reflexes from the (400) and (440) planes occurring at the 2&thgr;-angles 45.8 and 66.8 degrees when using CuK&agr; radiation identify the &ggr;-phase Al2O3. The alumina layer is also very strongly textured in the [440]-direction. The Al2O3 layer is virtually free of cracks and halogen impurities. Furthermore, the Al2O3 layer gives the cutting edge of the tool an extremely smooth surface finish.