Martensitic transformation of AISI D2 tool steel continuously cooled from 1303 K to the cryogenic temperature of 173 K is investigated by dilatometry using 10 or 50 K s−1 cooling rates. A ‘typical’ expansion takes place from the \( M_{\text{s}} \) temperature and reaches a maximum at 325 K. However, an atypical behavior is observed below this temperature implying the activation of further martensitic transformation. A modification to existing equations is proposed, which allows for more accurate description of the kinetics of martensitic transformation. Scanning electron microscopic studies indicated the presence of plate and lath martensite for both cooling rates. Carbide precipitation takes place at the rate of 10 K s−1 before the start of martensitic transformation while it was not observed when the 50 K s−1 rate was used. Transmission electron microscopic studies revealed that the microstructure also contains a significant amount of nano-twinned martensite.