Plasma electrolytic nitrocarburizing (PEN/C) was applied to the surface of carbon steel under the boiling condition of saturated urea electrolyte. In addition to the general effect of the bath temperature, different applied voltages and processing times were also considered in this new process. Optical and scanning electron microscopy, X‐ray diffraction, microhardness and pin‐on‐disc wear tests were used to characterize the PEN/C‐treated surfaces. A mixture of θ‐(Fe3C) and ε‐(Fe2–3N) was found in the compound layers. At certain conditions, dense surface layers with minimum porosity were observed at the top of the samples. The boiling condition resulted in special character of the compound layers on the surface. The layers consisted of some irregularities grown inward the samples andaffected the characteristics of the surface layers. The microhardness of the PEN/C‐treated layers increased up to 1280 HV0.1, which was 3 to 4 times higher than that for untreated material and higher than that obtained by other investigators (750 HV0.1). PEN/C decreased the wear loss of carbon steel significantly due to the change of the adhesive wear of untreated material to the abrasive mode of treated surfaces. The major advantage of this technique was a higher growth rate of the nitrocarburized layers and a more significant improvement in the tribological performance of the treated samples if compared to similarly oriented surface treatments. Copyright © 2011 John Wiley & Sons, Ltd.