Abstract Ferritic 15 %-Cr steels have better oxidation resistance, due to their higher chromium content, and creep strength, their lower dislocation density and lack of lath microstructure than conventional martensitic steels such as MarBN. Their mechanical properties are sensitive to chemical composition and heat treatment. In this study, we first simulated the formation of stable phases in two ferritic steels containing 2 % nickel (wt.%) and an alloy without nickel using the thermomechanical software MATCALC. Microstructural analysis using scanning electron microscope (SEM) and energy dispersive X-ray spectroscopy (EDS) reveals the formation of carbides and intermetallic phases after diffusion annealing, both during rapid cooling in oil and slow cooling in the furnace. Dilatometry and XRD studies confirm the gradual phase transformation of ferrite to austenite from 650 °C onwards during heating. Dilatometry also shows that ferritic steels have a lower coefficient of thermal expansion than martensitic steels, austenitic steels, and superalloys, which results in lower thermal stresses during frequent start-up and shutdown of power plants.