The essences of the quenching and partitioning (Q&P) process are to stabilize the finely divided retained austenite (RA) via carbon (C) partitioning from supersaturated martensite during partitioning. Competitive reactions, i.e., transition carbide precipitation, C segregation, and decomposition of austenite, might take place concurrently during partitioning. In order to maintain the high volume fraction of RA, it is crucial to suppress the carbide precipitation sufficiently. Since silicon (Si) in the cementite θ (Fe3C) is insoluble, alloying Si in adequate concentrations prolongs its precipitation during the partitioning step. Consequently, C partitioning facilitates the desired chemical stabilization of RA. To elucidate the mechanisms of formation of transition η (Fe2C) carbides as well as cementite, θ (Fe3C), besides the transformation of transition carbides to more stable θ during the quenching and partitioning (Q&P) process, samples of 0.4 wt% C steels tailored with different Si contents were extensively characterized for microstructural evolution at different partitioning temperatures (TP) using high resolution transmission electron microscopy (HR-TEM) and three-dimensional atom probe tomography (3D-APT). While 1.5 wt% Si in the steel allowed only the formation of η carbides even at a high TP of 300 °C, reduction in Si content to 0.75 wt% only partially stabilized η carbides, allowing limited η → θ transformation. With 0.25 wt% Si, only θ was present in the microstructure, suggesting a η → θ transition during the early partitioning stage, followed by coarsening due to enhanced growth kinetics at 300 °C. Although η carbides precipitated in martensite under paraequilibrium conditions at 200 °C, θ carbides precipitated under negligible partitioning local equilibrium conditions at 300 °C. Competition with the formation of orthorhombic η and θ precipitation further examined via ab initio (density functional theory, DFT) computation and a similar probability of formation/thermodynamic stability were obtained. With an increase in Si concentration, the cohesive energy decreased when Si atoms occupied C positions, indicating decreasing stability. Overall, the thermodynamic prediction was in accord with the HR-TEM and 3D-APT results.