Abstract: A free cutting steel containing tin less than 0.05% in mass fraction was developed, which possessed good machinability and satisfactory mechanical properties meeting the national standard of China. The forms and distribution of inclusions and tin in the steel were investigated by observations of the steel samples and the fracture of the mechanical testing samples by means of SEM and EDS. The results showed that the complex inclusions, nodular or spindle-shaped, were composed mainly of oxides and manganese sulphide. It was found that there were marked segregation of tin in the fracture and on the surfaces of inclusions in the steel.