Cavitation erosion is a main reason for the damage of hydro turbines. It is important to understand the cracking mechanism of hydro turbine steel in cavitation erosion. In this study, the crack initiation in CA6NM steel after cavitation erosion was examined through electron backscatter diffraction analyses. The crack propagation was investigated adopting focused ion beam milling and transmission electron microscopy. The reversed austenite transformed to strain-induced martensite in cavitation erosion. The lattice parameter of the strain-induced martensite was greater than that of the thermal martensite, which led to stress concentration between the two martensites and caused crack formation and propagation in the region. Finally, approaches aiming to improve the cavitation erosion resistance of hydro turbine parts are suggested.