The goal of this work is to understand the connections between stress, structural and mechanical property development during the drying of particulate coatings containing rigid particles, and the how these conditions are impacted by coating formulation variables and processing conditions. The motivation is to better predict and control the coating performance by optimizing the formulation design and drying condition. Characterizing drying behavior and correlating the stress development with microstructure evolution are critical in this research. In Chapter 3, drying characterization approaches are introduced. To extend the capability of stress measurement, walled substrates with different dimensions and materials were designed. And a shrinkage measurement method allowing convenient correlation of the microstructure change with stress development was developed using laser profilometry technique. Chapters 4-6 focus on investigating the role of formulation variables on the drying and cracking of coatings prepared with micron-sized particles. Chapter 4 focuses on studying the effect of particle size distribution. The study showed that with similar average particle size, coatings prepared from particles with a wide particle size distribution form a more compact microstructure, but are prone to cracking due to high tensile stress development on drying. Chapters 5 and 6 study the effect of particle shape on coatings cracking resistance. Different levels of clay particles were added to particulate coating systems prepared from the irregular-shaped ground calcium carbonate (GCC) particles and the spherical-shaped silica particles. The different geometry constraints of the mixed particles have altered impacts on the drying shrinkage and mechanical strength of the coatings, thus different cracking behaviors were observed. Finally, in Chapter 7 attention is shifted from the particulate coatings with the micron-sized particle to those prepared from nano-sized particles. Formulation variables of particle size and shape were characterized using coatings of nano-silica particles, nano-zinc oxide particles, and fumed-silica.