The purpose of this study was to demonstrate the novel technique of laser deposition of Fe-based powder under cryogenic conditions provided by a liquid nitrogen bath. Comparative clad layers were produced by conventional laser cladding at free cooling conditions in ambient air and by the developed process combining laser cladding and laser gas nitriding (hybrid) under cryogenic conditions. The influence of process parameters and cooling conditions on the geometry, microstructure, and hardness profiles of the clad layers was determined. The optical microscopy (OM), scanning electron microscopy (SEM), energy-dispersive spectrometer (EDS), and XRD test methods were used to determine the microstructure and phase composition. The results indicate that the proposed technique of forced cooling the substrate in a nitrogen bath during the laser deposition of Fe-based powder is advantageous because it provides favorable geometry of the clad, low dilution, a narrow heat-affected zone, a high hardness and uniform profile on the cross-sections, homogeneity, and refinement of the microstructure. The influence of the forced cooling on microstructure refinement was quantitatively determined by measuring the secondary dendrite arm spacing (SDAS). Additionally, highly dispersed nanometric-sized (200–360 nm) precipitations of complex carbides were identified in interdendritic regions.