A Fe-based SMA/PZT (shape memory alloy/lead zirconate titanate piezoelectric ceramics) composite coating was prepared on 304 stainless steel by laser cladding technology, and the coating shows fine metallurgical bonding with the substrate. The microstructure, phase composition, residual stress, microhardness, wear and corrosion resistance of the composite coating were investigated by scanning electron microscopy, X-ray diffractometer, X-ray stress analyzer, microhardness tester, friction tester and electrochemical workstation respectively. The results show that the composite coating is composed of PZT, γ austenite and an ε martensite phase. The microhardness of the composite coating is more than twice as high as that of the SMA coating, and the residual compressive stress of that is more than the SMA coating because of the piezoelectric effect of PZT and the stress self-accommodation characteristic of Fe-based SMA coating. Composite coating shows excellent wear resistance. Its friction coefficient is 1/2 of the SMA coating and 1/3 of the substrate, and its volume wear is only 1/4 of the SMA coating and 1/8 of the substrate, and the corrosion resistance is also improved compared with SMA coating.