Abstract Decarburization behavior of WC–Co particles in terms of transformation of WC to W2C and W, and formation of η and γ phases and microstructure evolution during plasma spraying have been systematically investigated in this study. The extent of the carbon loss of WC was tailored by either altering cooling conditions of substrate/pre-coating or spraying the particles into the media with different temperatures. It is revealed that loss of carbon of WC was alleviated by protection of Co during the coating formation stage. W2C exhibits epitaxial growth on the WC substrates in perpendicular direction and forms a nearly complete shell around the WC particles. η phase was formed as a result of decarburization and diffusion of associated phases and is located around WC–Co splats with its crystals being in cross shape. The γ phase in rod-like shape with a size of 10–20 nm embeds within the binder Co and is clearly well separated from WC grains. Further decarburization-induced W was detected mainly in Co binder, being apart entirely from WC grains. The main advantage of Co for preventing decarburization in WC–Co particles is not associated with oxidation, but instead the diffusion-controlled carbon loss. These findings would facilitate fabrication of the WC-based cermet coatings with excellent mechanical properties in particular wear resistance for extreme wear applications.