The topic of the present experiments are transition metal diboride coatings of composition (Ti0.49W0.51)B2 and (Ti0.44W0.30Cr0.26)B2. The coatings were deposited on steel substrates using dc magnetron sputtering. We investigated how annealing in argon at elevated temperatures modifies microstructure. The as-deposited films are amorphous. Annealing between 700 and 1100 °C results in the formation of nano-crystalline precipitates with average grain diameters of about 10–50 nm. A TiC phase (Fm-3m; a ≈ 4.3 Å) is observed as the dominating precipitate phase. In addition, small amounts (10%–20%) of a Cr23C6 phase (Fm-3m; a ≈ 10.6 Å) are observed. In contrast to literature data on the same coatings deposited on silicon substrates, the formation of boride precipitate phases is strongly suppressed here. From investigations with X-ray diffractometry, electron microscopy and secondary ion mass spectrometry we conclude that the nanostructure of the coatings is formed by reactive phase formation of the boride coating with the carbon containing steel substrate.