Hot compression tests on a newly designed hot extrusion Nickel‐based powder metallurgy superalloy are conducted at various deformation conditions. The contact friction coefficient (f) between the die and forged part is determined as 0.30–0.40 by analyzing the results of simulation and the real experiment. A new coefficient B is introduced to evaluate the bulging levels and relate the value of f. The critical strains to prevent peripheral cracks are found to relate closely to the processing parameters. Thermally induced porosity and MC type carbides of grain boundaries are the primary mechanism for inducing cracks. Examinations on microstructure of cracking demonstrate that the cracks propagate along grain boundaries. A model is proposed to illustrate the formation of fractures during hot forging.