The billets of M3 high speed steel (HSS) with or without niobium addition were prepared via spray forming and compared with traditional cast steels with same composition, followed by hot forged and heat treated. The corresponding microstructure evolutions of steels induced by niobium have been investigated using SEM with EDS, XRD, OM, TEM and HRTEM. The results show that finer and uniformly-distributed grains without macrosegregation appear in the as-deposited HSS that are different to the as-cast HSS, 1% (mass fraction) niobium addition can promote the formation of primary MC-type carbides before onset of eutectic reaction, which can make the MC particles refined and evenly distributed. Niobium mainly contribute to the primary MC-type carbides by consuming carbon, the eutectic reaction is suppressed and the quantity of M₂C eutectic carbides decrease, leading to more W and Mo atoms dissolve into matrix. Compared to spray formed M3 HSS, the niobium alloying M3 HSS possesses higher stability during austenitization, induced by the high stabilization of Nb-containing MC carbides, which can pin the grain boundaries and keep the grain size of primary austenite below that of spray formed M3 HSS. The quenched hardness of niobium-containing steel is remarkably higher, while the over tempering hardness of it is a little below than that of M3 HSS, it is related to the difference of dissolution rate of carbides during austenitization and the precipitation behavior of the secondary carbides after tempering. The amount of Nb-containing MC carbides are hard to dissolve into matrix, additionally, lower content of M₂C carbides are in the as-deposited steel, leading to the larger numbers of nano-scaled M₂C secondary carbides precipitate after tempering. Spray formed niobium-containing steel has a more advanced hardness and bending strength compared with ASP23, but possesses a lower impact toughness due to that the stress concentration can easily caused by mass of harder MC carbides distributed in matrix.