Eutectoid transformation occurs when a solid solution decomposes into a fixed two solid constituents at a fixed temperature. When a liquid decomposes in the same way, an analogous eutectic transformation occurs.

The iron-carbon eutectoid is the paradigm example. Here, the austenite phase breaks down to produce ferrite and cementite (iron carbide) at about 0.6% carbon and 723°C. As for eutectic transformations, the result is often a lamellar structure such as pearlite or bainite. Alloys of nearly eutectoid composition are called high-carbon steel, while those which do not undergo eutectoid transformation are termed mild steel.