The effect of intercritical heat treatments on the tensile properties of iron-based P/M steels was investigated. For this purpose, atomized iron powder (Ancorsteel 1000) was admixed with 0.3 wt.% graphite powder. Tensile test specimens were cold pressed at 700 MPa and sintered at 1120 degrees C for 30 min under pure argon gas atmosphere. After sintering, similar to 20% pearlite volume fraction in a ferrite matrix was obtained. To produce coarse ferrite + martensite microstructures, the sintered specimens were intercritically annealed at 724 and 760 degrees C and quenched in water. To obtain fine ferrite + martensite microstructures, the sintered specimens were first austenitized at 890 degrees C and water-quenched to produce a fully martensitic structure. These specimens were then intercritically annealed at 724 and 760 degrees C and re-quenched. After the intercritical annealing at 724 and 760 degrees C and quenching, martensite volume fractions were similar to 18% and 43%, respectively, in both the coarse- and fine-grained specimens. Although the intercritically annealed specimens exhibited higher yield and tensile strength than the as-sintered specimens, their elongation values were lower. Specimens with a fine ferrite + martensite microstructure showed high yield and tensile strength and ductility in comparison to specimens with a coarse ferrite + martensite microstructure. The strength values of specimens increased with increasing martensite volume fraction.