In this research, microstructural evolution of nanosized tungsten carbide during heatup stage of sintering of a novel electroless nickel-coated nanostructured WC–Co powder was investigated. Toward this purpose, a mechanical milling process was executed on commercial microcrystalline WC–Co (mc-WC) to achieve nanostructured WC–Co (nc-WC) powder. Electroless nickel plating was performed on the as-milled powder to obtain nickel-coated nanostructured WC–Co (Ni/nc–WC). The nc-WC and Ni/nc–WC powders were subjected to cold-pressing in a uniaxial die followed by heatup stage of sintering from 25°C to a temperature range of 1000–1300°C under argon atmosphere. The microstructural characterizations were carried out by X-ray diffractometry (XRD), high resolution field emission scanning electron microscopy (HR FESEM) and high resolution transmission electron microscopy (HRTEM). The ball milling process resulted in the formation of nc-WC powder containing nanosized WC with average grain size of ~15nm. A uniform nickel layer with a thickness of <100nm was formed around Ni/nc–WC particles through nickel plating. A two-step grain growth trend was observed during heatup of nc-WC: a slow grain growth step at temperatures ≤1000°C, which led to WC grain size of ~76nm, and a rapid step by heating to the temperature range of 1100–1300°C which caused a substantial increase in WC grain size to ~925nm. In contrast, WC grain size in Ni/nc–WC sample varied in the range of ~15–250nm with temperature rising from 25 to 1300°C representing about 72% reduction in WC grain size for Ni/nc–WC compared to nc-WC. In case of nc-WC, surface faceting of nanosized WC occurred upon heating to ≤1000°C; meanwhile, on heating to 1100–1300°C, the coalescence mechanism was operative accounting for the rapid grain growth. As for Ni/nc–WC, surface faceting of WC grains was greatly suppressed. This led to the retardation of the coalescence mechanism, making it possible to form ultrafine-grained Ni/nc–WC material.