Like many other intermetallic materials, MoSi2 coatings are typically hard, but prone to catastrophic failure due to their low toughness at ambient temperature. In this paper, a self-assembled hierarchical structure that closely resembles that of nacre (i.e., mother of pearl) was developed in a MoSi2-based coating through a simple, yet cost-effective, depostion technique. The newly formed coating is tough and can withstand multiple indentations at high loads. Key design features responsible for this remarkable outcome were identified. They include a functionally graded multilayer featuring elastic modulus oscillation, varying sublayer thickness and a columnar structure that are able to attenuate stress concentrations; interlocking boundaries between adjacent sublayers that improve the bonding and arrest the cracks; a transitional layer that bridges the coating and substrate and facilitates load transfer. Moreover, the contributions of six important structural characteristics to damage resistance are quantified using finite elemnet analysis and in an additive manner (i.e., from low- to high-level complexity). The in-situ toughened coating is envisaged to enhance the mechanical performance and extend the lifespan of metal components used in safety-critical applications.