By　using　an　SEM,　micro-specimens　of　grey　and　nodular　iron　with　ferrite　matrix　were　serially　intermittently　loaded,　observed　in　situ　and　photographed.　Their　micro　deformation　and　fracture　processes,　especially　interfacial　mechanical　behaviours,　were　investigated.　Graphite　internal　fracture　or　graphite/matrix　interfacial　cracking　processes　carried　out　until　final　fracturing　was　found　out.　It　has　been　confirmed　that　graphites　in　cast　iron　could　not　always　be　regarded　as　voids　with　almost　no　strength　and　a　new　explanation　on　graphite　related　to　mechanical　properties　has　been　made.　On　the　basis　of　the　new　understanding,　an　optimum　microstructure　was　designed　and　its　excellent　mechanical　properties　were　proved.　©　1997　Elsevier　Science　S.A.