Cladding hard-surfacing alloys on tool steel is an effective approach to enhance the surface properties of tool steel. In this study, a Co-based alloy was deposited on tool steel by Directed Energy Deposition (DED) following a three-factor three-level design of experiment matrix with varied laser power, scan speed, and powder flow rate. The microstructure of the deposits was characterized using scanning electron microscopy (SEM). The residual stress on the surface of the samples was measured by the X-ray diffraction (XRD) sin2ψ technique. The parameters that produced promising deposits were used to fabricate samples for tensile test, four-point bending test, Charpy impact test, and hardness measurement. The result reveals that the processing parameters have a significant role in the residual stress of the coatings. Residual stress reduces with the increase of laser energy density. Cracks were found at samples with energy density below a threshold. Tensile testing of the coating/substrate combined structure reveals fracture at the coatings with an ultimate tensile strength of 633.9 ± 54.7 MPa. The bi-material interface survived the tensile test, indicating a strong interfacial bond. The four-point bending test of coating/substrate laminates shows an ultimate flexure strength of 860.6 ± 36.9 MPa. Cracks initiated from the coatings ignored the interface and penetrated the substrate, suggesting a solid bi-material bond. Charpy impact test shows the absorbed energy of coating/substrate laminates is more than doubled that of the substrate.