Iron and cobalt alloys were exposed to a CH4-H2 mixture at about 670 °C during the chemical vapor deposition (CVD) of diamond film. Severe carburization is observed on pure Fe and Co-10Al alloy, resulting voluminous graphite preferentially formed before diamond deposition. To clarify the catalytic graphite mechanism, microstructures and compositions around the substrates-graphite interfacial region have been comprehensively analyzed by transmission electron microscopy (TEM). Severe internal carburization on pure Fe leads to a metastable Fe3C carbide layer formed and then decomposed, finally resulting in the precipitation of graphite. Meanwhile, graphitization also occurs on low-Al alloy (Co-10Al), the graphite is precipitated from AlCo3C carbide as substrate carburization occurs. As a comparison, such a graphite interlayer is inhibited when the substrate carburization is effectively hindered on high-Al alloys (Fe-25Al, Co-30Al), attributed to the protection of an alumina-rich layer on the alloy surface.