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Sulfur was taken as a residual element in steel for investigating the sulfide stress-cracking characteristics. The tests were performed by controlling the shape and the amount of the sulfide inclusions by adding rare earth metal (REM) and varying the sulfur content from 0.002 to 0.019 percent. Susceptibility to sulfide stress cracking was found to be correlated to the sulfur content and also to the shape of the inclusions. Detailed observation of crack nucleation showed that though precracks nucleate and grow from elongated sulfide inclusions to form large cracks in conventional steels, the nucleation can be suppressed by controlling the shape of sulfide inclusions to the globular type. The results of this work suggest that controlling the shape of sulfide inclusions by adding an optimum amount of REM is so effective that it would completely minimize the detrimental effect of sulfur against hydrogen sulfide stress cracking.