The applicability of laser ultrasonics for the determination of grain size and phase composition in steels under different temperatures was investigated. This was done by obtaining the velocity and attenuation of propagating ultrasonic waves in a simulated steel medium. Samples of ferrite and austenite with varying microstructures were modelled and simulated with the finite difference method, as were samples with varying ratios of austenite and martensite. The temperature of the medium was taken into account as an essential parameter, since both velocity and attenuation are temperature dependent. Results of the velocity and attenuation analysis showed that the use of the wave propagation velocity is not feasible for determination of grain size or phase composition due to a high sensitivity to temperature and sample thickness. The frequency-dependent ultrasonic wave attenuation was less sensitive to the variation of temperature and sample thickness. It can be concluded that accurate knowledge of the temperature is essential for obtaining a correct grain size or phase ratio estimation: a temperature accuracy of 100 °C yields a grain size accuracy in the order of a micrometer using the attenuation. Similarly, a temperature accuracy of 70 °C leads to a phase ratio estimation accuracy of 10%.