A coated cutting tool includes a substrate and a surface coating, wherein the coating is a Ti(C,N,O) layer comprising at least one columnar fine-grained MTCVD Ti(C,N) layer with an average grain width of 0.05-0.4 μm and an atomic ratio of carbon to the sum of carbon and nitrogen (C/(C+N)) contained in the MTCVD Ti(C,N) layer being on average 0.50-0.65. A method for manufacturing the coated cutting tool includes depositing the MTCVD Ti(C,N) layer.