This article presents an outline of the physical metallurgical principles that are associated with heat treating of steels. It describes the iron-carbon phase diagram and various types of transformation diagrams, including isothermal transformation diagrams, continuous heating transformation diagrams, and continuous cooling transformation diagrams. The primary design criteria for heat treating of steels this article covers are the minimization of distortion and undesirable residual stresses. The article presents the theoretical and empirical guidelines to understand sources of common heat-treating defects and how they can be controlled. It also presents an example to demonstrate how thermal and transformation-induced strains cause dimensional changes and residual stresses.