Abstract This study deals with layer composites of carbide reinforcements and stainless steel prepared successfully by powder technology. The layer material consisted of two layers. The top layer consisted of reinforcements (TiC and NbC) and 465 stainless steel as the binder material for the carbides. The bottom layer was entirely of binder material (465 stainless steel). The microstructure of the composite was characterized by scanning electron microscopy. The microstructural study revealed that the top layer (TiC–NbC/465 stainless steel) showed the typical core–rim microstructure of conventional steel bonded cermets and the bottom layer showed the structure of sintered steel. An intermediate layer was found with a gradient microstructure, having a higher carbide content towards the cermet layer and lower carbide content towards the stainless steel layer. The bending strength of the layered material measured in the direction perpendicular to the layer alignment was remarkably high. The variation of strength as a function of the thickness of the bottom layer revealed that the character of the material changed from the cermet, to a layer composite and then towards metallic materials. The wear resistance of the top layer was studied against high speed steel. The wear mechanisms were discussed by means of microscopical observations on the worn surfaces. The wear was severe at higher wear loads and lower TiC content. Microploughing of the stainless steel matrix was found to be the dominant wear mechanism. Heavy microploughing and rapid removal of material from the wear surface was observed at high wear load. The fracture morphologies of the top, bottom and intermediate layers are reported.