Fe–TiC metal matrix composite powder is manufactured applying vacuum inert gas atomization technique. The TiC reinforcement phase forms in situ within spraying of the Fe‐based molten metal preliminary alloyed with 1 wt% [C] and 4 wt% [Ti]. Alloying strategy, homogenization time, and spraying temperature are varied for three conducted atomization experiments in this study. Medium particle size (d50) lies in a range of 41–55 μm for obtained spherical powders. Scanning electron microscopy (SEM) analysis and Energy‐dispersive X‐ray spectroscopy (EDX) mapping of powder cross‐section samples reveal well‐dispersed submicron TiC precipitates of two different morphologies—primary‐blocky and eutectic‐plate‐shape carbides. The amount of precipitates and their morphology depend on the particle size. Namely, coarser powder particles tend to have more primary carbides that are presumably formed already in liquid droplets. Meanwhile, TiC precipitation in finer particles up to ≈25 μm is completely suppressed due to an extremely high cooling rate. Difficulties of the Fe–Ti–C melt atomization (e.g., formation of a semiliquid slag layer, loss of TiC forming elements, the presence of large precipitates in a powder) are discussed considering the thermodynamic analysis of this system and Fe–TiC remelting experiments conducted on a hot stage microscope.