An investigation was conducted to study the influence of tool steel microstructure on initial material transfer and friction. Two different powder metallurgy tool steels and an ingot cast tool material were tested in dry sliding against 1.4301, 1.4162, Domex 355 MC and Domex 700 MC sheet materials. It was found that tool steel hard phase heights influence initial material transfer and friction. The coefficient of friction increased with decreasing tool steel hard phase heights at 50 N normal load and initial material transfer occurred around protruding hard phases. At higher load of 500 N the sheet material adhered to both the tool steel matrix and hard phases. Coefficient of friction decreased with increasing proof strength of the sheet material at 500 N normal load.