A multilayer tungsten carbide particle (WCp)-reinforced Ni-based alloy coating was fabricated on a steel substrate using vacuum cladding technology. The morphology, microstructure, and formation mechanism of the coating were studied and discussed in different zones. The microstructure morphology and phase composition were investigated by scanning electron microscopy, optical microscopy, X-ray diffraction, and energy-dispersive X-ray spectroscopy. In the results, the coating presents a dense and homogeneous microstructure with few pores and is free from cracks. The whole coating shows a multilayer structure, including composite, transition, fusion, and diffusion-affected layers. Metallurgical bonding was achieved between the coating and substrate because of the formation of the fusion and diffusion-affected layers. The Ni-based alloy is mainly composed of γ-Ni solid solution with finely dispersed Cr7C3/Cr23C6, CrB, and Ni+Ni3Si. WC particles in the composite layer distribute evenly in areas among initial Ni-based alloying particles, forming a special three-dimensional reticular microstructure. The macrohardness of the coating is HRC 55, which is remarkably improved compared to that of the substrate. The microhardness increases gradually from the substrate to the composite zone, whereas the microhardness remains almost unchanged in the transition and composite zones.