The effects on microstructucture of austenitising temperature and cooling rate during hardening were studied for a hot-work tool steel. Transformation temperatures were determined by dilatometry, scanning electron microscopy was used to characterise the microstructure and both retained austenite contents and their lattice parameters were measured by neutron diffraction. For lower cooling rates, lower austenitising temperatures produce larger amounts of both retained austenite and bainite. Retained austenite in bainitic structures is higher in carbon than in martensitic structures. Consequently, lowering the austenitising temperature will affect microstructure and properties.