The paper summarizes current knowledge of growth defects in physical vapor deposition (PVD) coatings. A detailed historical overview is followed by a description of the types and evolution of growth defects. Growth defects are microscopic imperfections in the coating microstructure. They are most commonly formed by overgrowing of the topographical imperfections (pits, asperities) on the substrate surface or the foreign particles of different origins (dust, debris, flakes). Such foreign particles are not only those that remain on the substrate surface after wet cleaning procedure, but also the ones that are generated during ion etching and deposition processes. Although the origin of seed particles from external pretreatment of substrate is similar to all PVD coatings, the influence of ion etching and deposition techniques is rather different. Therefore, special emphasis is given on the description of the processes that take place during ion etching of substrates and the deposition of coating. The effect of growth defects on the functional properties of PVD coatings is described in the last section. How defects affect the quality of optical coatings, thin layers for semiconductor devices, as well as wear, corrosion, and oxidation resistant coatings is explained. The effect of growth defects on the permeation and wettability of the coatings is also shortly described.