A new austenite-bainite steel matrix wear resistant composite reinforced by granular eutectics (abbreviated ABGE composite) has been obtained by controlling the solidification structure of the steel melt, which only contains manganese and silicon, with modification of Al-Mg-Ce compound and air-hardening. It has been found that the granular eutectic is a pseudo-eutectic of austenite and (Fe,Mn)(3)C, which is formed between austenite dendrites during solidification due to the segregation of C and Mn enhanced by modifying elements. The granulation of the eutectic can be explained by the heterogeneous nuclei of MgS and CeO2 and by the influence of the modifying elements on the crystallization of the eutectic. The eutectic and bainite contents are 4%-10% and 20%-40%, respectively. The size of the eutectic is 5 mum-20 mum and its microhardness is HV800-1200. The wear resistance of the ABGE composite is much higher than that of the austenite-bainite steel, austenite-bainite ductile cast iron and medium manganese steel with nodular carbides under low and medium impact working condition because the granular eutectics effectively lighten the intrusion of abrasives into the worn surface and microcutting by abrasives on the worn surface and austenite-bainite matrix structure has high strain-hardening ability.