Recent progress in the synthesis, characterization, and biological compatibility of nanostructured ceramics for biomedical implants is reviewed. A major goal is to develop ceramic coating technology that can reduce the friction and wear in mating total joint replacement components, thus contributing to their significantly improved function and longer life span. Particular attention is focused on the enhancement of mechanical properties such as hardness, toughness, and friction coefficient and on the bioactivity as they pertain to the nanostructure of the material. The development of three nanostructured implant coatings is discussed: diamond, hydroxyapatite, and functionally graded metalloceramics based on the Cr-Ti-N ternary system. Nanostructured diamond produced by chemical vapor deposition (CVD) techniques and composed of nano-size diamond grains have particular promise because of the combination of ultrahigh hardness, improved toughness over conventional microcrystalline diamond, low friction, and good adhesion to titanium alloys. Nanostructured processing applied to hydroxyapatite coatings is used to achieve the desired mechanical characteristics and enhanced surface reactivity and has been found to increase osteoblast adhesion, proliferation, and mineralization. Finally, nanostructured metalloceramic coatings provide continuous variation from a nanocrystalline metallic bond at the interface to the hard ceramic bond on the surface and have the ability to overcome adhesion problems associated with ceramic hard coatings on metallic substrates.