We study in this article the microstructure and phase transformation on the near-surface of 0.45% C carbon steel during the high current pulsed electron beam processing by using electron microscopy. Based on a physical model, the temperature profile is simulated for carbon steel. The depth of heat-affected zone, the initial melting position, heating rate and quenching rate are computed. The original crystalline structure was changed to a different degree that grew with the numbers of bombardment, and in the near-surface layer amorphous states and nanocrystaline structures consisting of grains of gamma-phase and cementite were formed after multiple pulses. (c) 2006 Springer Science + Business Media, Inc.