The applications of laser scanning confocal microscopy (LSCM) system were introduced to the track the phase transformation of steel. For the low and high carbon steel, the microstructural change along various thermal cycles was directly observed with LSCM system. The nature of non-themoelastic martensite was directly observed. Furthermore, direct checking of the nucleation site of ferrite phase was carried out for aluminum killed weld metal and titanium killed-steel. It was carried out concerning to acicular ferrite formation in high strength and low alloy steel. The assessment of the pinning effect of alumiunu nitride on the austenite phase at high temperature was also carried out by using LSCM system.