It was shown that mainly three effects are responsible for the increased quantity of retained austenite in carbon and low alloyed steels after laser transformation hardening. At low peak temperatures a high dislocation density appears in the initial austenite phase during the reversed polymorphic transformation which is preserved till the martensite transformation begins and retards this reaction. At high peak temperatures this is more complete carbides dissolution than after standard furnace hardening. Both effects are overlapped by a third one. This is the carbon up-hill diffusion resulting in surface enrichment of carbon and a decrease of the martensite start temperature.