<p>Nickel-based composite coatings, incorporating nanoparticles such as Y₂O₃, have gained significant attention due to their superior mechanical, tribological, and anticorrosion properties. These coatings are extensively used across industries including transportation, energy, and manufacturing. The study of composite coatings dates back to 1928 when copper-graphite coatings were first developed for self-lubricating automotive engine surfaces. However, recent advancements in electrodeposition have demonstrated that adding inert Y₂O₃ particles to metallic nickel coatings results in notable improvements in performance, far surpassing the properties of pure metal or alloy coatings. This review provides a comprehensive analysis of the latest developments in nickel-based composite coatings, focusing on the electrodeposition process, key parameters, and the optimization of functional properties. It also explores the various applications of these coatings and evaluates the significant advancements in the field. Furthermore, a comparison of Y₂O₃ nanoparticles with other materials highlights their unique advantages and identifies promising areas for future research and applications. This work not only summarizes existing knowledge but also underscores the potential of Y₂O₃-based composite coatings to address critical challenges in surface engineering, paving the way for future innovations.</p>