Additive manufacturing shows great potential for overcoming the limitations of traditional manufacturing processes, especially for tool steels exhibiting high hardness and wear resistance. However, hot cracking often limits the application of additively manufactured parts, and hence, clarifying the hot cracking mechanisms in engineering alloys is of great importance. In this work, the mechanism of hot cracking during direct laser deposition of D2 tool steels was studied. Thin-wall specimens were deposited under different laser powers (400 and 500 W) and the length of the cracks varied with the laser power and the position in the specimen. The cracks mainly formed in the inter-dendritic regions which comprised eutectic austenite and M7C3 carbides. The thermal history of the build was measured by pyrometry and the size of the cracks increased with the increasing number of reheating events above the solidus temperature. Based on these results, hot-cracking of the studied D2 steel could be ascribed to liquation cracking, induced and intensified by the repetitive liquation of the eutectics.