Cold-drawn pearlitic steel wires have the highest strength of all steel products. It is a promising way to enhance the mechanical properties by increasing the carbon content. However, the proeutectoid cementite forms easily due to the hypereutectoid composition and deteriorates the mechanical and processing properties of steel wires. It is important for hypereutectoid steel wire drawing to achieve a fine and fully pearlitic microstructure without proeutectoid cementite. The austenitization and following continuous cooling process were simulated in the dilatometer for a hypereutectoid steel. The microstructure was observed with OM and SEM. The transformation temperature, prior--austenite grain size, pearlitic interlamellar spacing and proeutectoid cementite thickness were determined by dilatometric curves or OM/SEM images. The austenite grain size increases rapidly with a higher temperature and almost keeps invariant with a longer austenitization time. Faster cooling rate, higher austenitization temperature or longer austenitization time decrease the starting and finishing temperature of phase transformation, widen the temperature range, refine the pearlitic interlamellar spacing and suppress the proeutectoid cementite precipitation (reduce the thickness or make it discontinuous). However, it is easy to form martensite which is bad for the homogeneity of pearlitic microstructure by increasing the cooling rate or austenitization temperature simply. A fine pearlite in a pseudoeutectoid microstructure is achieved by extending the austenitization time to 60 min and controlling the austenitization temperature and cooling rate. Discontinuous proeutectoid cementite is observed in the samples with the higher austenitization temperature. Higher austenitization temperature and longer time are helpful to weaken the carbon concentration gradient. The homogeneous carbon distribution restrains carbon diffusion for cementite nucleation during the proeutectoid cementite precipitation and pearlite transformation, which decreases the transformation temperature. Compare to pearlite transformation, the proeutectoid cementite precipitation is affected more strongly by the carbon diffusion due to a longer diffusion distance. Therefore, the precipitation amount of proeutectoid cementite is reduced if the carbon diffusion is restrained. The amount of grain corner and grain edge reduce more dramatically than that of grain boundary if austenite grain size increases. The proeutectoid cementite only nucleates in grain corner and grain edge. The pearlite nucleation can form in grain boundary. Therefore, the larger austenite grains result in the sharp reduction in the sites for nucleation of proeutectoid cementite. Then, the amount of proeutectoid cementite are reduced and the morphology becomes discontinuous.