In this paper, both traditional Inconel 718 parts and WC/Inconel 718 composites were fabricated by selective laser melting (SLM). The size of WC particles was observed to play a crucial role in determining the microstructural evolution, distortion, and microcracks around the WC particles, which inturn also affected the effective mechanical properties of WC/Inconel 718 composites. The use of the 5.25 μm diameter WC particles resulted in fine dendrites at the interface between the WC particle and the Inconel 718 matrix. This was attributed to the formation of an annular heat flow and radially arranged temperature gradient directions around the WC particle that increased the contact area between the matrix and the particle, thereby also improving the interfacial bonding. A sound metallurgical bonding at the interface was achieved with negligible distortion and microcracks due to a relatively uniform temperature distribution and temperature gradient (4.7 × 103 °C/mm) at the interface. This also explains the generation of dense and smooth interfacial bonding, which yielded a low average friction coefficient of 0.21. The wear properties were improved since grooves and spallation were reduced with the decrease of the WC size.