In this study, we obtained different morphology and size of epsilon carbides (ϵ-carbides) via low temperature tempering of 0.32 wt-% C low alloy wear resistance steel. The objective is to elucidate the determining role of size and morphology of carbides on mechanical properties and three-body impact wear resistance. The formation of small needle-like ϵ-carbides was responsible for increase in yield strength, low temperature impact toughness and three-body impact wear resistance. However, when the ϵ-carbides were large and rod-like, hardness, toughness and three-body impact wear resistance were significantly reduced. The wear mechanism of steel containing needle-like ϵ-carbides primarily involved plastic deformation associated with fatigue and small degree of abrasive wear and furrow, while steels containing rod-like ϵ-carbides were predominantly characterised by furrow.