Tool steel is any of various carbon steels and alloy steels that are particularly well-suited to be made into tools and tooling, including cutting tools, dies, hand tools, knives, and others. Their suitability comes from their distinctive hardness, resistance to abrasion and deformation, and their ability to hold a cutting edge at elevated temperatures. As a result, tool steels are suited for use in the shaping of other materials, as for example in cutting, machining, stamping, or forging.

Tool steels have a carbon content between 0.4% and 1.5%. The presence of carbides in their matrix plays the dominant role in the qualities of tool steel. The four major alloying elements that form carbides in tool steel are: tungsten, chromium, vanadium and molybdenum. The rate of dissolution of the different carbides into the austenite form of the iron determines the high-temperature performance of steel (slower is better, making for a heat-resistant steel). Proper heat treatment of these steels is important for adequate performance. The manganese content is often kept low to minimize the possibility of cracking during water quenching.

There are six groups of tool steels: water-hardening, cold-work, shock-resistant, high-speed, hot-work, and special purpose. The choice of group to select depends on cost, working temperature, required surface hardness, strength, shock resistance, and toughness requirements. The more severe the service condition (higher temperature, abrasiveness, corrosiveness, loading), the higher the alloy content and consequent amount of carbides required for the tool steel.

Tool steels are used for cutting, pressing, extruding, and coining of metals and other materials. Their use in tooling is essential; injection molds for example require tool steels for their resistance to abrasion- an important criterion for mold durability which enables hundreds of thousands of moldings operations over its lifetime.

The AISI-SAE grades of tool steel is the most common scale used to identify various grades of tool steel. Individual alloys within a grade are given a number; for example: A2, O1, etc.

W-group tool steel gets its name from its defining property of having to be water quenched. W-grade steel is essentially high carbon plain-carbon steel. This group of tool steel is the most commonly used tool steel because of its low cost compared to others. They work well for parts and applications where high temperatures are not encountered; above 150 °C (300 °F) it begins to soften to a noticeable degree. Its hardenability is low, so W-group tool steels must be subjected to a rapid quenching, requiring the use of water. These steels can attain high hardness (above 66 Rockwell C) and are rather brittle compared to other tool steels. W-steels are still sold, especially for springs, but are much less widely used than they were in the 19th and early 20th centuries. This is partly because W-steels warp and crack much more during quench than oil-quenched or air hardening steels.

The toughness of W-group tool steels is increased by alloying with manganese, silicon and molybdenum. Up to 0.20% of vanadium is used to retain fine grain sizes during heat treating.

Typical applications for various carbon compositions are for W-steels: