An ion source enhanced AlCrSiN coating for a cutting tool is provided. The ion source enhanced AlCrSiN coaling has gradient Si content and grain size, including sequentially an AlCrSiN working layer, an interlayer and an AlCrN bottom layer in order from a surface of the coating to a substrate, wherein from the AlCrN bottom layer to the AlCrSiN working layer, Si content in the interlayer is gradually increased, and the interlayer has a texture that changes from coarse columnar crystals to fine nanocrystals and amorphous body. A texture of the coating, in which the grain size is gradually decreased, sequentially includes coarse columnar crystals, fine columnar crystals and fine equiaxed crystals. A method for preparing the ion source enhanced AlCrSiN coating with the gradient Si content and grain size is provided as well as a cutting tool having the coating deposited thereon.