This chapter discusses the microstructure and slurry erosion characteristics of laser surface alloyed coatings that are used to mitigate the erosion issues of 13Cr-4Ni martensitic stainless steel. The chapter first describes the present scenario of surface modification methods, such as conventional welding, surface hardening/nitriding, external coatings, etc., which are being utilized to minimize the silt erosion problems of components in hydropower plants. The chapter also explains newer coating methods, such as laser surface alloying. It then describes the usefulness towards erosion mitigation in hydropower plant applications of laser surface alloying of 13Cr-4Ni steels with commercial coating powders such as Colmonoy 88 and Stellite 6. Erosion performances of coatings and substrates are evaluated using a slurry jet erosion test-rig with various parameters, using commercial silica sand and river sand. An evaluation of the effect of boron carbide addition on the erosion performances of laser surface alloyed coatings is given. An attempt has also been made to correlate the quantitative results (erosion performances) with qualitative results (erosion mechanisms) by extensive studies of eroded samples using scanning electron microscopy. By the end of the chapter, a correlation between measured and predicted erosion rates has been established in power-law formulation. © 2012 Woodhead Publishing Limited.