Dissolution of spheroidal cementite in austenite at 910°C has been studied by means of scanning and transmission electron microscopy. Three different morphologies of transformation have been observed. Most of the particles undergo a more or less homogeneous shrinkage. However, some of the particles transform to austenite by a Widmanstätten type of reaction, whereby austenitic plates form inside the cementite. It is also observed that some of the cementite transforms to M7C3 carbide and austenite by a eutectoid reaction. The results can be understood by considering the phase diagram and assuming that local equilibrium prevails at the phase interface during the reaction.