The new phase equilibrium of Fe-C diagram under magnetic field has been theoretically calculated. Results show that the magnetic field mainly shifts the γ⁄α+γ equilibrium line and the eutectoid point to the high carbon and high temperature sides. Based on this result, an experimental setup has been launched to investigate the effect of magnetic field on austenite decomposition in medium carbon and high carbon steels. The thermodynamic and kinetic effects of the high magnetic field on proeutectoid transformation at different cooling rates have been studied. It was found that for medium carbon steels, the magnetic field increases the amount of proeutectoid ferrite and accelerates the diffusional decomposition of austenite at medium and relatively fast cooling rates (10°C/min and 46°C/min). But there is no special grain growth along the field direction. The results led to a proposal of a new rapid annealing under a high magnetic field. However, when cooling is slow (2°C/min), the magnetic field shows a strong tendency to promote the proeutectoid ferrite grains to grow along the field direction through the magnetic dipolar interaction, which leads to the formation of an elongated grain structure. Moreover, the magnetic field also exhibits influence on the austenite decomposition in hypereutectoid steel by changing the amount of secondary cementite and lamellar spacing of pearlite.