Soft zone formation in dissimilar Cr–Mo welding occurs during post weld heat treatment that could compromise the integrity of the weldment. The decomposition of martensite could cause this formation at the weld heat affected zone adjacent to the fusion boundary. There could not yet determine the actual width of this zone. The extent of martensite decomposition in soft zone Cr–Mo steel dissimilar weld was observed in semi in-situ stages using the x-ray absorption spectroscopy (XAS) at Synchrotron facility. 2.25Cr–1Mo was welded using ER90S–B9 using GTAW process. PWHT was performed at 730 °C for 0.5 h and 2.0 h in a chamber with opening for Synchrotron light analysis at various locations away from the fusion boundary. This was complemented by microstructure and grain size analysis. The results showed the decomposition of martensite started at the fusion boundary and could extend beyond 1000 microns covering both CGHAZ and FGHAZ. Since the experiment was performed in normal atmosphere, the oxide film could form during PWHT on the surface of the specimen. More oxide formed was observed more in the location with high carbide contents. There was more oxide formation at the locations further distance from fusion boundary due to less martensite decomposition. Therefore, the extent of the phenomena could be stated by using information from oxide formation and martensite decomposition which could help to determine the risk on both creep life and oxidation.