The formation of low-density carbon deposits onto metallic heat transfer surfaces in industrial environments of high carbon activity can have a deleterious effect on thermal efficiency. Often this deposition occurs under reducing conditions and involves carbide (typically of iron) formation as part of the process. It is possible, however, for filamentous carbon deposits to form at much higher oxygen potentials where carbide formation is not favoured thermodynamically. This study considers one such situation by examining the behaviour of a 20Cr25Ni austenitic steel used as fuel cladding in Advanced Gas-cooled nuclear reactors (AGRs). Carbon deposition has been produced in laboratory by exposure at 550°C to CO2 containing 1%CO and 1000 vppm C2H4; the dissociation of the latter additive generates carbon activities much greater than unity. The oxygen potential of this gas is sufficient to oxidise iron and chromium, of the major alloy constituents, but not nickel. The deposition takes place onto substrates that are prepared as electron microscope samples which are subsequently examined by SEM and HREM (high resolution electron microscopy) techniques. The deposits formed consist of solid carbon filaments, approximately 30 nm in diameter, with turbostratic atomic layering. Each filament contains a 10–20 nm metallic nickel particle near its tip. It is argued, and supported by HREM evidence, that such particles are produced as a direct result of the oxidation of the alloy and that prior oxidation is necessary to produce the observed carbon deposition. It is also shown that inhibition of carbon deposition occurs when the oxygen potential of the depositing gas is increased sufficiently to oxidise nickel.