The decomposition of austenite, during controlled cooling or quenching, produces a wide variety of microstructures in response to such factors as steel composition, temperature of transformation, and cooling rate. This chapter provides a detailed discussion on the isothermal transformation and continuous cooling transformation diagrams that characterize the conditions that produce the various microstructures. It discusses the mechanism and process variables of quenching of steel, explaining the factors involved in the mechanism of quenching. In addition, the chapter provides information on the causes and characteristics of residual stresses, distortion, and quench cracking of steel.