An attempt to explain the fracture mechanism of tempered martensite embrittlement (TME) was made by investigating microstructural changes and impurity segregation during tempering of an AISI 4340 steel Particular emphasis was placed on studying microfracture processes at crack tips using an in-situ SEM technique. At the relatively low stress levels, shear bands were formed preferentially along the arrays of interlath cementite particles and microcracking occurred at the prior austenite grain boundaries. The failure eventually took place along localized shear bands in a ductile manner, although the crack path was occasionally deviated from the shear band only when the main crack met the discrete microcracks associated with the prior austenite grain boundaries. Examination of the fracture surfaces clearly revealed a transgranular ductile fracture mode without any evidence of intergranular fracture. Thus, the direct observations of the crack initiation and the fractographic results strongly suggest that the presence of carbide particles is the most important metallurgical factor leading to the tempered martensite embrittlement.