Abstract Fe-3.07at.%Mo alloy specimens were nitrided at 480 °C in a NH3/H2 gas mixture applying a nitriding potential of 0.25 atm−1/2. Selected area electron diffraction patterns (SADPs) of the nitrided zone showed continuous streaking in <100>α-Fe directions, which indicates the presence of fine, nano-sized precipitate platelets, with a coherent interface parallel to the {100} planes of the ferrite (a) matrix. The X-ray diffractograms, recorded from the specimen surface, showed an asymmetric broadening of the ferrite-matrix reflections which was especially pronounced for the (200) reflections, which hints at a tetragonal distortion of the (microstressed) ferrite matrix surrounding the precipitates. These misfitting, nano-sized precipitates cause a relatively high hardness as well as a compressive residual macrostress parallel to the surface in the nitrided zone adjacent to the surface: 900HV0.05 and 1100MPa, respectively.