The effect of VC addition on the microstructural evolution of Fe-TiC cermet has been investigated. The microstructures of the Fe-TiC varied with the amount of VC addition. The addition of 1wt% VC enhanced the instability of liquid-solid interface ; the dissolving interface showed round shape instead of facetted one which was ascribed to the increase of lattice mismatch between TiC and solid-solution carbide. in the speci-men with 10wt% VC the new set of solid-solution carbide grains of uniform and small size was formed in-side coarse TiC particles by diffusion induced recrystallizatin (DIR). With increasing the heat-treatment time fine recrystallized grains were dispersed homogeneously in the matrix and resulted in the increase in fracture strength.