In this study, we investigated the effect of grain size of an initial microstructure (pearlite + ferrite) on a resulting microstructure of induction-hardened microalloyed steel 38MnVS6, which is one topical medium carbon vanadium microalloyed non-quenched and tempered steel used in manufacturing crankshafts for high-power engines. The results show that a coarse initial microstructure could contribute to the incomplete transformation of pearlite + ferrite into austenite in reaustenitization transformation by rapid heating, and the undissolved ferrite remains and locates between the neighboring prior austenite grains after the induction-hardening process. As the coarseness level of the initial microstructure increases from 102 μm to 156 μm, the morphology of undissolved ferrite varies as granule, film, semi-network, and network, in sequence. The undissolved ferrite structures have a thickness of 250–500 nm and appear dark under an optical metallographic view field. To achieve better engineering applications, it is not recommended to eliminate the undissolved ferrite by increasing much heating time for samples with coarser initial microstructures. It is better to achieve a fine original microstructure before the induction-hardening process. For example, microalloying addition of vanadium and titanium plays a role of metallurgical grain refinement via intragranular ferrite nucleation on more sites, and the heating temperature and time of the forging process should be strictly controlled to ensure the existence of fine prior austenite grains before subsequent isothermal phase transformation to pearlite + ferrite.