Austempered ductile iron provide a unique combination of strength and toughness coupled with excellent design flexibility for automotive application as compared to forged or cast steels. Some material properties such as thermal expansion coefficient and its influence in final machining tolerance is a matter of discussion in the automotive industry. In this study the effect of heat treatment cycle on the microstructure & thermal expansion of ADI was investigated. Samples were austempered at 275 º C and 375 º C for one hour and then dilatometric test carried out in the temperature range of 50 °C to 350 °C, then the result was compared with the thermal expansion coefficient of forged steel. Microstructure and mechanical investigations were used to the assurance of these results. The results indicate that replacing of forged steel with ADI due to lower cost production and reduction in weight is possible if the correct tolerance were selected.