The laser cladding of Fe-based alloys on a medium carbon steel substrate was performed using a CO2 laser and Ar shielding gas that was blown into a molten pool. The rmcrostructure and cracking susceptibility of the laser-clad layers, were studied in terms of carbon additions. Results show that the small change of the carbon content in the alloy powders can obviously change the microstructure and properties of the layers. When the carbon content is in the range of 0.3-0.4 wt.%. the decrease of the carbon content in alloy powders will increase the hardness and toughness of the layers simultaneously under the same process parameters. As a result, crack-free coatings with high hardness can be obtained. As the carbon content increases from 0.2 wt.%, to 0.4 wt.%, the segregation ratio of chromium increases, while the segregation ratios of nickel. manganese. and silicon first decrease and then increase. At the same time, a new designing principle concerning the composition and microstructure has been put forward, and the principal mechanisms of strengthening and toughening of the layers are fine-grain strengthening and low carbon martensitic phase transformation strengthening (C) 2004 Elsevier BX All rights reserved.