We investigate the effect of continuous vs. periodically interrupted plasma exposure during cathodic arc evaporation on the elastic modulus as well as the residual stress state of metastable cubic TiAlN coatings. Nanoindentation reveals that the elastic modulus of TiAlN grown at floating potential with continuous plasma exposure is 7%–11% larger than for coatings grown with periodically interrupted plasma exposure due to substrate rotation. In combination with X-ray stress analysis, it is evident that the elastic modulus is governed by the residual stress state. The experimental dependence of the elastic modulus on the stress state is in excellent agreement with ab initio predictions. The macroparticle surface coverage exhibits a strong angular dependence as both density and size of incorporated macroparticles are significantly lower during continuous plasma exposure. Scanning transmission electron microscopy in combination with energy dispersive X-ray spectroscopy reveals the formation of underdense boundary regions between the matrix and TiN-rich macroparticles. The estimated porosity is on the order of 1% and a porosity-induced elastic modulus reduction of 5%–9% may be expected based on effective medium theory. It appears reasonable to assume that these underdense boundary regions enable stress relaxation causing the experimentally determined reduction in elastic modulus as the population of macroparticles is increased.