The effects of austenitizing temperature were investigated on the microstructure and mechanical properties of 12\% Cr steel. The distribution of carbides and the change of matrix structure were investigated by using analytical electron microscope. Hardness, tensile and impact tests were carried out to study the variation of mechanical properties. The dissolution behavior of carbides during austenitizing and the corresponding effects on tempering process were discussed by considering tempering resistance, and the microstructural development was correlated with the mechanical properties. The hardness of as-normalized martensite increased with increasing austenitizing temperature up to $1000\,^\circ\!C$ due to the $M_{23}C_6$ carbide dissolution, and then remained almost constant above $1000\,^\circ\!C$. The austenitizing at $900\,^\circ\!C$ showed little secondary hardening, while the austenitizing above $1000\,^\circ\!C$ produced the secondary hardening as a result of the dissolution behavior of $M_{23}C_6$ carbides. During tempering above $600\,^\circ\!C$, the progressive softening was delayed to the higher tempering temperature with increasing austenitizing temperature. Low-temperature austenitizing at $900\,^\circ\!C$ induced the carbide coarsening during subsequent tempering due to the nucleation effect of undissolved $M_{23}C_6$. The large and spheroidized carbides enhanced the dislocation recovery and subgrain growth during further tempering. The complete dissolution of $M_{23}C_6$ above $1000\,^\circ\!C$ caused the fine carbide formation on lath boundaries, which retarded the dislocation recovery and subgrain growth during tempering. The dissolution of NbC above $1100\,^\circ\!C$ enhanced the tempering resistance through reducing the growth rate of $M_{23}C_6$ and increasing the stability of lath morphology. The increase in strength with increasing austenitizing temperature was attributed to the fine carbide distribution and the high dislocation density. ...