The use of chromium in the PM steel industry today puts high demands on the choice and control of the atmosphere during the sintering process due to its high affinity to oxygen. Particular attention is required in order to control the surface chemistry of the powder which in turn is the key factor for the successful sintering and production of PM parts. Different atmosphere compositions, heating rates and green densities were employed while performing sintering trials on water atomized steel powder pre-alloyed with 3 wt.% Cr in order to evaluate the effect on surface chemical reactions. Fracture surfaces of sintered samples were examined using high resolution scanning electron microscopy combined with X-ray microanalysis. The investigation was complemented with thermogravimetric (TG) studies. Reaction products in particulate form containing strong-oxide forming elements such as Cr, Si and Mn were formed during sintering for all conditions. Processing in vacuum results in intensive inter-particle neck development during the heating stage and consequently in the excessive enclosure of surface oxide which is reflected in less good final mechanical properties. Enhanced oxide reduction was observed in samples processed in hydrogen-containing atmospheres independent of the actual content in the range of 3-10 vol.%. An optimum heating rate was required for balancing reduction/oxidation processes. A simple model for the enclosure and growth of oxide inclusions during the sinter-neck development is proposed. The obtained results show that significant reduction of the oxygen content can be achieved by adjusting the atmosphere purity/composition. (C) 2012 Elsevier B.V. All rights reserved.