The microstructure and properties of tool steel parts built by laser powder deposition (LPD) depend considerably on the build-up strategy and on the processing parameters used. This dependence can lead to inconsistent results which may limit the widespread acceptance of LPD. There is, thus, a need for efficient process optimisation tools that take into consideration the complex phase transformations that may occur during the part build-up process and their effect on final properties. A model coupling finite element heat transfer calculations with transformation kinetic theory has been developed, which allows the microstructure and property distributions in parts produced by LPD to be predicted. Application of this model to the deposition of tool steels not only explains the origin of the heterogeneous distribution of properties usually mentioned in the literature but also allows designing build-up strategies that consistently lead to homogeneous, high quality parts. Its application to the study of the influence of substrate pre-heating and idle time between the deposition of consecutive layers is illustrated in the present paper.