The effect of heat treatment on microstructure and mechanical properties of a ferritic heat-resistant steel, 2.25Cr-1Mo, was investigated. The characteristics of carbides, i.e., size, morphology, distribution, and composition, in different stages of heat treatment were examined by using transmission electron microscopy (TEM) and energy dispersive X-ray (EDX). As the heat treatment proceeded from normalizing and tempering (NT, the delivery state), simulated post-welding heat treatment (PWHT), to step cooling (SC), the carbides evolved from M 3 C, Mo 2 C to M 7 C 3 , M 23 C 6 . The uniformly dispersed carbides, e.g., Mo 2 C, M 7 C 3 , and M 23 C 6 , are responsible for the excellent mechanical properties and creep resistance of the steel. The result demonstrates that the coarsening of carbides deteriorates impact toughness and the morphology, crystal structure, and chemical composition of carbides are also important influencing factors.