The epsilon carbide is transition carbide of between Fe2C and Fe3C composition, with hexagonal close packing microstructure, which forms over a range of 250-400 ºC temperature during lower-bainite transformation. This transformation happens during tempering heat treatment of quenched steels, or during slow cooling in that temperature range.

It is fine dispersed carbide in a ferrite needle-like matrix. Lower bainite has lower tensile strength (about 5-10%), but usually same hardness as martensite structures, but with a higher toughness.