1215 steel is a low-carbon free-cutting steel with the largest production, and its quality issues are complex and diverse. The formation mechanism of cracks formed during drilling of a cold drawn prestressing 1215 free-cutting steel was investigated by means of optical microscopy, scanning electron microscopy, high-temperature laser scanning confocal microscopy, and Thermo-Calc software. The failure was caused by abnormally wide pearlite with large amounts of sulfide nearby. We speculate the abnormal microstructure was related to C and S segregation in columnar-to-equiaxed transition zone during continuous casting process. However, element segregation was an inherent property in the continuous casting process. Reheating was an important process for homogenization to eliminate segregation, but the reheating temperature was lowered to reduce production costs. The lower reheating temperature resulted in incomplete elimination of columnar-to-equiaxed transition zone segregation, ultimately leading to the formation of abnormal microstructure. This batch of 1215 steel wire was not suitable for producing component required transverse plasticity during machining, but could be used to produce circular shaft components. In the future, it is suggested to increase the reheating and hot-rolling temperature, or take effective measures to reduce segregation during continuous casting.