Carbon atoms occupy interstitial sites in iron so that the configurations of any solid-solution at constant composition depend solely on the distribution of carbon atoms on the interstitial sub-lattice, this in turn being influenced by interactions between carbon atoms in close proximity. The carbon-carbon interaction energy, which influences the distribution of carbon atoms, is reviewed with a view to understanding the nature of the interaction and to highlight some recent developments in the subject. It appears that the C-C interaction energy for ferrite cannot be deduced from the thermodynamic data currently available, primarily because of the very low solubility of carbon in ferrite. On the other hand, there is ample evidence to support the view that the corresponding energy for austenite is consistent with a strong repulsion between near neighbour pairs of carbon atoms. (C) 2004 Kluwer Academic Publishers.