The present investigation focuses on the effect of Cr2AlC MAX phase addition on erosion and oxidation‐induced crack healing behavior of Ni–Mo–Al alloy. For this, Ni–Mo–Al and 20 wt% Cr2AlC‐blended Ni–Mo–Al powders were coated by Air Plasma Spray (APS). For oxidation‐induced crack healing studies, the samples were heat treated at 500, 800, and 1100°C in the air for 5 hours. The heat‐treated samples were analyzed by X‐Ray Diffraction (XRD) analysis, Scanning Electron Microscopy (SEM), and Energy Dispersive Spectroscopy (EDS) for the phases, morphology, and composition. Erosion behavior studies were carried out at 30, 250, 500, 800, and 1000°C temperatures. The average hardness was obtained to be 400 ± 10 HV for Ni–Mo–Al coating and 580 ± 10 HV for 20 wt% Cr2AlC‐blended Ni–Mo–Al coating. The addition of Cr2AlC MAX into Ni–Mo–Al matrix reduces the overall erosion rate and improved the crack healing ability. This was attributed to the presence of in‐situ‐formed Cr7C3 and Al2O3 phases.