This course provides the most recent background and understanding of two important aspects necessary for further advances in optical coatings: A) Effect of energetic ion- and photon-induced reactions at the surface during the film growth by different complementary techniques including ion (beam) assisted deposition (IAD or IBAD), balanced and unbalanced magnetron sputtering (BMS and UMS), dual ion beam sputtering (DIBS), filtered cathodic arc deposition (FCAD), and plasma-enhanced chemical vapor deposition (PECVD), while concentrating on the most recent pulsed-discharge processes and time- and spatially-resolved diagnostic methods. This includes the principles and capabilities of the microstructural characterization methods suitable for materials assessment, for process optimization and for reverse engineering. B) Metrology of the mechanical, tribological and other functional properties of optical films and their long term stability in various temperature, radiative and environmental conditions. It makes a link between the optical, mechanical and other characteristics, the film microstructure and the film growth mechanisms, allowing one to better perform film system optimization. This is illustrated by numerous practical examples of filter performance with discrete and graded designs ranging from antireflective coatings to complex telecom and astronomical filters to the optical coatings on plastics.