Understanding the failure mechanisms of multilayer coatings is essential for optimizing their tribological performance. In this study, an in situ scanning electron microscopy (SEM) tribotester was used to simultaneously monitor friction force and visualize the wear behavior of TiN/Ag multilayer coatings under dynamic contact conditions. Eight coatings were designed with varying numbers of layers (single, double, 5, and 10 layers) and different topmost layers of TiN or Ag to examine the influence of the layer structure and stacking sequence. The scratch resistance of the coatings was evaluated using ultrananoscratch testing, which revealed that the soft-top (ST) structure with Ag as the topmost layer exhibited better damage resistance and wear stability than the hard-top (HT) structure with TiN as the topmost layer. The in situ SEM tribotest enabled the direct observation of diverse wear behaviors in thin coatings such as groove formation, delamination, cracking, and tearing. The ST structures exhibited progressive groove creation and wear particle formation, whereas the HT structures exhibited a brittle failure behavior characterized by delamination and crack initiation from the initial cycles. After the in situ SEM tribotest, focused ion beam cross-sectional analysis revealed failure mechanisms, including shear deformation, interlayer cracking, and crack filling, which were attributed to the cycling of compressive and tensile stresses induced by the reciprocating motion of the tip. Remarkably, the ML10ST coating achieved the highest wear resistance, benefiting from bendability and stress dissipation via plastic deformation of the Ag layer. These findings provide insights into the correlation between the multilayer structure, tribological performance, and failure mechanisms, offering fundamental insights and design guidelines for wearable multilayer coatings.