Microstructural observations of prior-austenite grain boundary cementite in tempered martensite of an Fe–2%Mn–0.36%C alloy were performed. Grain boundary cementite could be markedly refined by applying ausforming. Unlike the case of the non-ausformed specimen, no coarse cementite films were observed and fine cementite particles with various variants tended to form at a serrated prior-austenite grain boundary in the ausformed specimen.