A 2.5 kW CO2 continuous wave laser has been used to modify the surface microstructure of low carbon steel with chromium. The laser-induced surface microstructure has been studied as a function of processing parameters such as power density, laser beam-substrate interaction time and energy density (product of power density and beam-substrate interaction time). The effects of surface roughness, alloyed layers with various depths and hardness distribution on the abrasive wear properties were studied. Microstructural analysis performed by transmission electron microscopy, optical microscopy and X-ray diffraction of the alloyed layers showed two types of structure depending on composition and energy density. A block-on-ring test system was employed to evaluate the wear properties of the laser-surface-alloyed layers. The wear surface was examined with a scanning electron microscope. It was found that the laser radiation and rapid solidification changed the microstructure of the surface layers, resulting in an increase of surface hardness and resistance to abrasive wear compared with the bulk material. High energy density processing produced a martensite-ferrite mixture and some retained austenite structure exhibiting higher hardness than the austenite-ferrite structure produced by low energy density processing. The wear resistance increases with decreasing surface roughness and increasing surface hardness. The wear mechanism consists of the formation of grooves (ploughing by the abrasive particle) and the removal of chips during the repeated passes. The higher hardness permits shallow wear grooves in the worn surface.