Chromium is an attractive alloying element in low alloyed steels since it gives good hardenability at low cost. The drawback with using chromium in powder metallurgy (PM) grades is its high affinity for oxygen. Thermodynamic calculations show that the oxygen partial pressure should be ,4610 218 atm at 1120uC in order to have reducing conditions for a powder grade prealloyed with 3 wt-%Cr and 0?5 wt-%Mo, which is supported by sintering experiments. With graphite added to the powder grade, conditions are reducing during sintering at higher partial pressures of oxygen (up to 10 216 atm) due to favourable conditions locally in the material. Sintering of the powder grade with 0?35 wt-% graphite added at 1120uC for 30 min at reducing conditions leads to high mechanical properties, although kinetics is insufficient for complete reduction of chromium oxides. At 1250uC, kinetics is faster and practically all oxides are reduced after sintering for 30 min, with enhanced mechanical performance as result.