The effect of different combination of austenitization temperatures and tempering treatments on microstructure and impact toughness has been studied for the cold work tool steel -Uddeholm Caldie. This is a chromium, vanadium and molybdenum alloyed tool steel with approximately 0.7 wt.% C. It is used as a tool in industrial applications such as cutting, punching, shearing, forming, drawing and extrusion. A combination of high hardness and adequate toughness is required to withstand the common tool failure modesof chipping and cracking.Retained austenite content, hardness and prior austenite grain size were measured. The impact toughness was determined for un-notched impact test specimens. The microstructure and fracture surfaces of impact tested samples were characterized both macroscopically and microscopically. Scanning Electron Microscopy, Light Optical Microscopy and X-Ray Diffraction measurements were used. Higher austenitization temperatures resulted in larger amounts of retained austenite and higher hardness. A higher austenitization temperature also caused coarsening of austenite grains and resulted in reduced toughness. Impact specimens austenitized and tempered at lower temperatures were found to have better toughness than those at high austenitization and tempering temperatures.