In the current investigation, a comparison between two type 4130 low-alloy steel powders produced by both gas and water atomization, and later processed by Laser-powder bed fusion was carried out. Samples fabricated from the water atomized powder showed relative density levels exceeding 99%, slightly lower than those achieved with the gas atomized powder. Both steels exhibited similar metallurgical features after solidification, showing a microstructure that is mainly composed of partially tempered martensite, bainite, and retained austenite. Additionally, micro-segregation of alloying elements was detected in the as-built microstructure, which contribute to a local increase in microhardness. The excess of oxygen found in the water atomized powder tended to combine with silicon and form nano-sized SiO2 inclusions. During the laser processing, the complex heating and cooling effects generated by adjacent laser tracks and by overlapping layers led to an in-situ tempering of the fresh martensite. Accordingly, the hardness values of steels in as-built condition were equivalent to those of conventionally quenched samples tempered at 350 °C and 450 °C, for gas atomized and water atomized steels, respectively. Finally, a comparison in terms of mechanical properties of the investigated steels showed that the powder atomization process resulted in limited changes in steel performance.