The present work studies the development of a 40Fe-60VC (vol-%) cermet by powder metallurgy techniques. The base powder was obtained by mechanical high energy milling to reduce both particle and reinforcement size in order to improve powder microstructure. The modified powder was compacted by uniaxial and cold isostatic pressing. The compacts were sintered in vacuum at different temperatures and times, and characterised by several techniques, including the determination of density and hardness, study by XRD to determine the constituents after sintering, and a complete microstructural analysis by SEM and TEM. The present study reveals that a Fe-VC cermet with favorable microstructure and performance can be obtained by in-situ reaction synthesis.