The effects of nitrogen (N) and niobium (Nb) contents on the precipitation behaviors of AlN, Nb(C,N), and AlN‐Nb(C,N) precipitates and austenite grain growth during the pseudo‐carburizing process are investigated for the carburized steel SCr420H. The results indicate that an increase of N content from 0.011% to 0.019% leads to the emergence of fine and uniform austenite grain structure in the sample while being held at 930 °C for 6 h, which is attributed to a notable rise in the number density of AlN and a decrease in the coarsening rate of AlN. In the steel containing 0.023% Nb, the composite precipitates AlN‐Nb(C,N) play a primary role in the pinning effect on austenite grains growth. The isolated Nb(C,N) and AlN precipitates have minor pinning effects due to their very low volume fractions. Nb(C,N) cap forming on AlN substrate obeys the Shoji–Nishiyama orientation relationship. The favorable lattice matching between AlN and Nb(C,N) and accelerated coarsening rate of Nb(C,N) cap decrease hindrances to the nucleation, growth, and coarsening of Nb(C,N) on AlN substrate. Meanwhile, these simultaneous effects also suppress the same processes for the isolated Nb(C,N) in the matrix.