In this paper, new steel matrix composites have been developed by powder metallurgy/HIP and abrasive wear and aluminum sticking resistance of the materials have been investigated. The microstructure examination showed that Co-coated WC reinforcement was partly dissolved in a high speed steel (HSS) matrix and an interface layer of M6C formed, but both Co-coated WC and NbC reinforcements were stable in a high vanadium tool steel (CPM10V) matrix. The NbC reinforcement was also stable in a HSS matrix at the same HIP parameters. Property test results indicate that Co-coated WC-reinforced composites have higher abrasion resistance than the composites with NbC, but the latter possess the lowest aluminum sticking propensity. Compared with unreinforced alloys, abrasion wear resistance of the composites was increased by a factor of 3 to 10, most for the HSS-matrix composites.