  Despite of the appearance of numerous new materials, the iron based alloys
and steels continue to play an essential role in modern technology. The
properties of a steel are determined by its structural state (ferrite,
cementite, pearlite, bainite, martensite, and their combination) that is formed
under thermal treatment as a result of the shear lattice reconstruction "gamma"
(fcc) -> "alpha" (bcc) and carbon diffusion redistribution. We present a review
on a recent progress in the development of a quantitative theory of the phase
transformations and microstructure formation in steel that is based on an ab
initio parameterization of the Ginzburg-Landau free energy functional. The
results of computer modeling describe the regular change of transformation
scenario under cooling from ferritic (nucleation and diffusion-controlled
growth of the "alpha" phase to martensitic (the shear lattice instability
"gamma" -> "alpha"). It has been shown that the increase in short-range
magnetic order with decreasing the temperature plays a key role in the change
of transformation scenarios. Phase-field modeling in the framework of a
discussed approach demonstrates the typical transformation patterns.
