The V-O-N coating set was produced at different relative oxygen concentrations of O2(x) = O2/(N2 +O2) using cathodic arc evaporation. The aim of the research was to determine the effect of oxygen on coating properties. The coatings’ composition and structural properties (X-ray diffraction (XRD), scanning electron microscopy (SEM), energy dispersive X-ray spectroscopy (EDX)) and mechanical properties—hardness, adhesion, and wear resistance (nano-indenter, scratch tester, ball-on-disc tester)—were extensively investigated. EDX and XRD analyses indicate that in coatings formed with a relative oxygen concentration in the range of 20–30%, the oxygen concentration in the coating increases dramatically from approximately 16 at.%. to 63 at.%, and the nitrogen concentration drops from about 34 at.% up to 3 at.%. This may indicate greater activity of oxygen compared to nitrogen in forming compounds with vanadium. The occurrence of the V5O9 phase belonging to the Magnéli phases was observed. Microscopic observations indicate that the number of surface defects increases with the oxygen concentration in the coating. The opposite effect is characterized by mechanical properties—hardness, adhesion, and wear resistance decrease with increasing oxygen concentration in the coating.