In-situ observation on the austenite grain growth and martensite transformation in a developed NM500 wear-resistant steel were conducted on a Confocal Laser Scanning High-temperature Microscope (CSLM). Results indicated that the martensite nucleation did not synchronously proceed during quenching process. The selective prenucleation dominated in martensite nucleation, which dividing untransformed austenite into several regions, and resulting in the larger size of fresh martensite. Martensite can not only nucleate at parent austenite grain boundaries, but also nucleate in the preformed martensite laths and twins. Smaller constraint in the martensite growth was achieved in a larger parent austenite grain size, leading to the longer fresh martensite and secondary martensite. Besides, the transformation kinetics of martensite was accelerated in a higher quenching temperature. Moreover, the martensitic laths presented in parallel laths (0~2°) based on the pre-formed lath or distributed in triangle, parallelogram or hexagon with an angle of 60° or 120°. Interestingly, martensitic lath also traversed the unstable new parent austenitic grain boundaries. In addition, the size of austenite grains increased with the quenching temperature, and austenite grains coarsened in a short time at a higher quenching temperature of 1160 ℃. Furthermore, a large amount fine dispersed particles redissolved and ripped at 1160 ℃, resulting in the many large and visible carbonitrides.