The present invention relates to a coated cutting tool for metal machining with a from about 2.0 to about 20 μm thick PVD coating, having both the wear resistance of a coating of homogeneous layers and the toughness of a multilayer coating, comprising a first (Mec1,Mec2)(C,N,O) layer where Mec1 is one or more of the elements in the transition metal group IV-VI, Al and Si and Mec2 is one of the elements in the transition metal group IV-VI from about 1.0 to about 4.5 μm thick, a second (Med1,Med2)(C,N) layer where Med1 is one or more of the elements in the transition metal group IV-VI, Al and Si and Med2 is one of the elements in the transition metal group IV-VI and Y, from about 0.5 to about 4.5 μm thick, and in between the first and the second layer, an (Mee1, Mee2)(C,N,O) layer where Mee1 is one or more of the elements in the transition metal group IV-VI, Al and Si and Mee2 is one of the elements in the transition metal group IV-VI and Y, from about 0.1 to about 1.0 μm thick, where the thickness of the in between layer is less than about 0.5 times the thickness of thinnest of the first and the second layer and the layers in between has a composition differing from the first and the second layer, and a method of making thereof.