Powder metallurgy is one way of producing complex, graded structures that could allow material systems to be produced with properties tailored to individual applications. However, powder metallurgy requires that the semi-finished products are very similar to the final component. It is much more economical to produce simple semi-finished products and then combine them by powder forging and simultaneous compaction than forming complex components with the desired graded structure. However, it is absolutely necessary that the graded structure of the semi-finished products is maintained during the forming process. In this study, pre-sintered cylindrical semi-finished products, consisting of axially graded as well as radially graded components, were produced by powder forging at 1100 °C. The microstructures, densities and mechanical properties of the final components were investigated to verify the effectiveness of the process route. It was observed that the components formed solid structures after compaction, in which the reinforcing ZrO2 particles were fully integrated into the transformation-induced plasticity steel matrix.