In this study, the cause of failure of a low-carbon steel pipe meeting standard KS D 3562 (ASTM A135), in a district heating system was investigated. After 6 years of operation, the pipe failed prematurely due to pitting corrosion, which occurred both inside and outside of the pipe. Pitting corrosion occurred more prominently outside the pipe than inside, where water quality is controlled. The analysis indicated that the pipe failure occurred due to aluminum inclusions and the presence of a pearlite inhomogeneous phase fraction. Crevice corrosion occurred in the vicinity around the aluminum inclusions, causing localized corrosion. In the large pearlite fraction region, cementite in the pearlite acted as a cathode to promote dissolution of surrounding ferrite. Therefore, in the groundwater environment outside of the pipe, localized corrosion occurred due to crevice corrosion by aluminum inclusions, and localized corrosion was accelerated by the large fraction of pearlite around the aluminum inclusions, leading to pipe failure.