The Japanese sword is produced from a special kind of steel called tamahagane, using a forge-fold operation repeated several times. The purpose of this study is to clarify the development of microstructures with successive forge-fold operations using tamahagane. Specimens under several stages of sword making have been investigated with optical microscopy, scanning electron microscopy and electron probe micro analysis methods. Microstructures have been found to be a combination of ferrite and pearlite with a lot of nonmetallic inclusions. The ferrite bands become finer and among other inclusions Fe2SiO4 takes a spherical shape with increasing recurrence of forge-fold operations.