The phosphide eutectic formation process in high purity Fe-4.6%C alloy, in which 0.02%～1.0%P was added, was studied with DTA, SEM and EDS, and the effect of cerium on the morphology of phosphide eutectic in the ternary Fe-C-P alloy was also investigated. The results show that the ternary phosphide eutectic with the addition of 0.04%P is formed at low cooling rate. After cerium is added, the morphology of phosphide eutectic is changed from non-continuous or continuous distribution net to round or nodular form locating along the eutectic cell boundaries.