The precipitation of secondary carbides in spray-formed M3:2 high-speed steels with or without 2% niobium (Nb) addition during overtempering at 600 °C was characterized, and the carbides were identified in detail using transmission electron microscopy. Strengthening in the peak-hardened state is due to coherent precipitates of types MC and M2C. During overtempering, the hardness of M3:2 steel greatly decreases due to M2C coarsening with the precipitation of M3C carbide, whereas the very fine and dense nature of the M2C precipitates is responsible for the remarkable long-time strength exhibited by the Nb-containing steel. The MC precipitates, however, are fairly stable. The addition of Nb results in substantial dissolution of Mo and Cr into the matrix prior to tempering, which refines the secondary M2C precipitate dispersion and delays overaging reactions; therefore, superior tempering resistance can be obtained.