Electric arc sprayed coatings with a disperse lubricating phase have potential for use in a variety of industrial applications as bearing materials including low friction coatings for drill string joints in the oil industry to reduce casing wear and lower drilling torque. This paper describes the optimisation of electric arc spray parameters for Fe-0.06wt.%C that will subsequently be used as a self-lubricating coating matrix. The effect of electric arc spray parameters on the microstructure of a Fe-0.06wt.%C matrix has been characterised in terms of deposition rate, temperature during manufacture, porosity and microhardness. It has been shown that the local coating temperature during directly affects the fmal coating porosity, grain size, grain morphology and microhardness. The most effective parameter in controlling coating temperature was the coating deposition rate. The Fe0.06wt.% C coating microstructure was primary equiaxed ferrite with a dispersion of spherodised Fe3C particles formed from the in-situ tempering of the as-sprayed martensite or bainite during spraying. A fuller analytical treatment of these phenomena is given elsewhere (13). Fe-0.06wt.%C powder particles microstructure was primarily bainitic or martensitic. A small number of Fe-0.06wt.%C powder particles showed a dendritic phase which has been proposed as retained austenite because of austenite stabilisation by fme grains and the N2 atmosphere, or an unidentified nitride layer.