The effect of vanadium (V) on the nucleation of M23C6 and vanadium carbide (VC) precipitation in Fe-Cr-V alloy was studied by field emission scanning electron microscopy (FE-SEM), high-resolution transmission electron microscopy and thermodynamic calculations. The results revealed that the lattice constant of M23C6 decreased when V atoms diffused into M23C6, which resulted in a reduction in the strain energy and increase in the driving force for the nucleation of M23C6. The V-rich zone was also formed in M23C6 as the V content increased, thereby resulting in the precipitation of a new VC particle adjacent to M23C6 as well as a new orientation relationship (OR), specifically o1 [11]THORN VC [o242]THORN M23C6 and 1/2 [011] VC==1/2 [111] M23C6. Based on the OR, the formation process of VC in M23C6 was discussed by atomic-scale structure analysis.