Abstract Carbide precipitation during upper and lower bainite formation in high-carbon bearing steel 100Cr6 is characterized using transmission electron microscopy and atom probe tomography. The results reveal that both ε and θ carbides precipitate in lower bainite isothermally held at 260°C and only θ precipitates form in upper bainite isothermally held at 500°C. ε and θ precipitate under paraequilibrium condition at 260°C in lower bainite and θ precipitates under negligible partitioning local equilibrium condition in upper bainite at 500°C. In order to theoretically study ε and θ precipitation and the ε→θ transition in bainite, thermodynamic calculations have been carried out using ab initio techniques. We find that ε and θ carbides in ferrite have almost identical thermodynamic stability, and hence have similar formation probability. In austenite, however, cementite formation is clearly preferred: it is favored by 5kJmol−1 at room temperature and still by 4kJmol−1 at 500°C. Hence, the thermodynamic predictions agree well with the atom probe tomography results.