Increasing use of plasmas have been made in materials processing and thin film technology. The ``plasma'' provides an ``in situ'' source of activated gas and energetic ionic species which can be used to enhance various physical and chemical processes that can influence the growth and properties of condensing films. In this paper we will discuss the Activated Reactive Evaporation process to elucidate the role of plasma in overall growth and properties of the films deposited using this technique. A brief comparison of this technique with yet another physical vapor deposition technique, viz reactive sputtering will be included. Current techniques used to implement the Activated Reactive Evaporation process together with its application to synthesize various coatings for tribological applications will be discussed.