This study aims to investigate the effect of an aluminum chromium nitride (AlCrN) coating on tool wear and hole quality in the conventional drilling process of carbon fiber-reinforced plastic (CFRP) composites, titanium alloy (Ti), and CFRP–Ti stack workpieces popular in the aerospace industry. The advanced arc plasma acceleration (APA) method of physical vapor deposition (PVD) was used for all AlCrN coatings. The drilling experiments were conducted with uncoated drills as well as AlCrN-coated drills. When drilling CFRP only, the AlCrN coating was removed at the drill cutting edges and the margin area, which suggests the carbon fibers abraded the coatings. When drilling Ti only, the AlCrN-coated drill mitigated the Ti adhesion formation, which resulted in less tool wear. In addition, hole quality for both CFRP and Ti was improved when the coating was used versus the uncoated tool. The machinability of CFRP–Ti stacks in the drilling process was improved by utilizing the advanced AlCrN coating on the WC tool in terms of drilling forces and hole quality parameters such as average hole size, average hole roundness, hole surface roughness, and Ti exit burr height.