Laser powder deposition (LPD) is a rapid manufacturing process, whereby near-net-shape components are fabricated by the successive overlapping of layers of laser melted and resolidified material. As new layers of material are deposited, heat is conducted away from recently resolidified material, through the previously deposited layers, inducing cyclic thermal fluctuations in the part as it is built up. These thermal cycles can activate a variety of metallurgical phenomena, such as solid-state transformations, leading to a progressive modification of the material’s microstructure and properties. Since the thermal history of the material in the deposited part will differ from point to point and depends on the deposition parameters and build-up strategy, the finished part may present complex distributions of microstructure and properties. In order to achieve the best properties, the deposition process must be optimized and, given its complexity, this optimization can only be effectively done using mathematical simulation methods. In this paper a thermo-kinetic LPD model coupling finite element heat transfer calculations with transformation kinetics and quantitative property–structure relationships is presented. This model was applied to the study of the influence of substrate size and idle time between the deposition of consecutive layers on the microstructure and hardness of a ten-layer AISI 420 steel wall built by LPD. The results show that the thermal history and, hence, the microstructure and properties of the final part, depend significantly on these parameters.