Powder metallurgy is a new method for mass production of precision components with appropriate mechanical properties, but in this kind of materials (PM parts) with special microstructures (pores act as local stress risers), fracture due to fatigue is expected as an important destructive factor. Various microstructures in powder metallurgy steels, depending on alloying methods, have different response against cyclic loading. diffusion bonding is an effective method to obtain high fatigue performance in PM steels. The main characteristic of this materials consists of well-organized phases distribution due to incomplete diffusion of alloying elements. In this study fatigue behavior of diffusion-bonded, distaloy AE, steel with two carbon contents under different periodic loading are investigated. The effect of carbon content and various loading mode upon fatigue performance is analyzed. Metallugraphy and fractography examination on fatigue loaded samples revealed the positive effect of microstructure heterogeneity on fatigue crack behavior and this concept is a reason for increasing of diffusion-bonded powders application to manufacturing of components that are subjected to cyclic stresses.