Abstract <p>When graphite is dissolved in liquid iron, its microcrystals break down into graphite nanocrystals and carbon atoms. Carbon steel melts consist of iron and graphite nanocrystals, iron and carbon atoms. In carbon steels, structural transformations are mainly nanostructured processes. The elementary components of these processes are iron and graphite nanocrystals. Austenite microcrystals are mainly formed from them. Austenite is not a solid interstitial solution of carbon in γ-Fe. Cementite nanocrystals are formed from iron nanocrystals and austenite graphite, and cementite (iron carbide) molecules are formed from iron and austenite carbon atoms. Ferrite microcrystals are formed from nanocrystals and iron atoms of austenite. Cementite microcrystals are formed from nanocrystals and cementite molecules.</p>