The microstructures and local composition variations in centrifugally atomized high-sulfur stainless steel powder are investigated. Both fcc and bcc are found to be primary solidification phases in the as-solidified powder of this nominally austenitic steel where the smaller powder particles (≲ 70 micron diameter) tend to be bcc.Cellular solidification structures, with sulfide precipitates (100 to 200 nm diameter in size) at the cell walls, are observed in both fcc and bcc particles. The bcc structure, however, has many small sulfide precipitates (10 to 20 nm diameter) in the cell interior with few larger sulfide precipitates at the cell walls. The small precipitates, observed only in the bcc structures, form on cooling from a supersaturated solid solution that results from reduced solute partitioning during solidification. Partitioning of chromium and nickel is minimal in these cellular structures. A non-cellular bcc structure is also observed with small sulfide precipitates throughoutthe entire structure. This non-cellular bcc structure results from smooth-front massive solidification. Analysis of the nucleation process for solidification indicates that a transition from fcc nucleation to bcc nucleation occurs with increasing wetting angle in heterogeneous nucleation. Thus bcc should nucleate in the smaller droplets of a liquid dispersion where catalytic surfaces of low potentcy (large wetting angle) tend to be the only heterogeneous nucleants available.