Steel remains to be one of the most common structural materials in the world as human civilization advances from the Iron Age to the ongoing Silicon Age. Our knowledge of its microstructure evolution and structure-performance relationship is nevertheless still incomplete. We report the observation and characterization of a long ignored metastable phase formed in steels with body-centered cubic (bcc) structure using both transmission electron microscopy and density functional theory calculations. This omega phase has a hexagonal structure and coherent interface with the matrix; a(omega), = root 2 x a(bcc) and c(omega) = root 3/2 x a(bcc). It is 3.6% smaller in volume and 0.18 eV higher in energy than bcc-Fe, with atoms in alternating close- and loose-packed layers couple anti-ferromagnetically. Carbon plays a crucial role in promoting bcc to omega transformation. At a concentration higher than 4 at.% they tend to segregate from the bcc matrix to the omega-phase; at about 14 at.%, they can induce bcc to omega transformation; and finally at 25 at.%, they stabilize the omega phase as omega-Fe3C. The omega phase in bcc Fe can serve as sinks for vacancies, H, and He atoms, leading to improved resistance of martensitic steels to irradiation damage. (C) 2013 Elsevier B.V. All rights reserved.