In this paper we investigated the microstructure and phase transition of atomized Fe-(1.3, 7.9, 11.7 wt.%) Mn alloy powders. The results show that the main phases of Fe-1.3Mn, Fe-7.9Mn and Fe-11.7Mn powders are ferrite, α'-martensite+austenite, α'-martensite+ε-martensite+austenite, respectively. The δ-ferrite in the Fe-1.3Mn powder is the high-temperature δ-ferrite directly formed from liquid, companying by a small number of nanometer sized austenite particles precipitated from the ferrite matrix. In the Fe-11.7Mn powder, the γ-austenite, ε-martensite and α'-martensite are found in the same region and have the K-S orientation relationship, suggesting phase transitions of γ-austenite → ε-martensite → α'-martensite and γ → α'-martensite.