Heat generated within the grinding zone is used to generate a hardened layer in grinding hardening. The phase fraction and carbon content of the hardened layer have significant effects on its mechanical properties. Specially, the heating rate is extremely high and the duration time beyond A c1 (austenitization starting temperature) is short in grinding hardening, so the austenitization is sometimes incompleted and the carbon content is always non-uniform. In the present paper, three-dimensional finite element method (FE) incorporating a regular triangle heat source is used for computing temperature histories of the specimen. Microstructure evolution model of austenitization of AISI 1045 steel considering the heating rate in grinding hardening is developed by using the cellular automata method (CA). In the CA model, austenite nucleation, pearlite dissolution, austenite growth in proeutectoid ferrite, and carbon diffusion are considered and simulated based on their respective theories. A new variable t d (duration time beyond A c1) is defined to describe the temperature history characteristic. The effects of grinding parameters on the temperature characteristic variables are studied. Meanwhile, austenitization are simulated under different grinding parameters. The microstructure of the hardened layer is observed in grinding hardening experiment to validate the CA model. The results show that, firstly, the CA model can effectively simulate the microstructure evolution. Secondly, both peak temperature and t d have significant effects on the austenitization in grinding hardening. Thirdly, better microstructure and mechanical properties can be obtained by optimizing grinding parameters.