The effects of cooling modes (air, furnace and water) on the variation of microstructure and mechanical properties of medium carbon steel were investigated. SEM, TEM and EBSD techniques were used to observe the microstructure. The observed results show that the effect of cooling mode on the grain size is insignificant. The average sizes of ferrite grain obtained under different cooling modes were little different. Moreover, in all the cases, most of the cementite lamellas were transformed into cementite particles, except for some of the residual cementite lamellas which were present on the original pearlite colonies. It has also been found that the ferrite substructure and precipitation of cementite particles are significantly affected by the cooling modes. Compared to other cooling modes, the furnace cooling is beneficial to the homogeneity of microstructure. The particles are distributed on the ferrite matrix more homogeneously after furnace cooling which results in a better combination of strength and ductility.