Powder metallurgy (P/M) has been widely used in automobile, home appliances, and electronic devices, but its uses are very limited due to the low relative density of 85 to 95 pct. The Fe-Ni-B-C alloy system can mitigate the aforementioned issues by the liquid phase sintering, which results in a nearly full densification. However, the boron-containing alloys produced the brittle eutectic phases [Fe-3(C, B) and Fe2B] along the grain boundaries, which are detrimental to the mechanical properties. The main objective of this study is to improve the ductility of boron-containing alloys through the microstructure modification. For this, the volume fraction of solidified phase was optimized by controlling the composition, and the coarsening of solidified alpha-Fe particles into the pearlite matrix was induced by a post annealing, which reduces the continuous network of eutectic phases and increased the grain continuity. In addition, the effect of microstructure modification on the mechanical properties of Fe-B-C and Fe-Ni-B-C alloys was comparatively investigated. As a result of microstructure modification, the post-annealed Fe-1Ni-0.4B-0.8C alloy exhibited a high elongation to failure of 5.2 pct.