The effect of vanadium on the bainite transformation of medium carbon high silicon steel during air cooling was studied by using Optical Microscopy (OM) and Transmission Electron Microscopy (TEM). The mechanical properties of the test steels subjected to heat treatment were measured by tensile, hardness and impact tests. The results showed that, through the same heat treatment process, the microstructure of the V-alloyed steel was comprised of Carbide-Free Bainite (CFB, bainite + retained austenite) and martensite while the microstructure of the V-free steel was composed of ferrite/pearlite, which made the V-alloyed steels exhibit superior combination of strength, hardness and toughness to the V-free steel, but the elongation of the V-alloyed steel was worse than that of the V-free steel somewhat. Vanadium was helpful for the transformation of bainite in the tested medium carbon high silicon steel under air cooling condition. The carbon-enriched retained austenite films in the CFB enhanced the toughness of the V-alloyed steel.