The microstructures of Ni-containing P/M steels produced by admixed powders or diffusion alloyed powders are usually heterogeneous. To improve the microstructure homogeneity, the effects of Mo and Cr additions in the prealloyed powder form were examined. The results showed that the microstructural homogeneity was improved and superior mechanical properties were achieved with increases in the alloy content, particularly for the Cr. Such a beneficial effect was attained due to the reduction of the repelling effect between Ni and C, as was demonstrated through thermodynamic analysis using the Thermo-Calc software.