carbon in small quantities is added to iron and one can get steel.
the size of carbon atoms is less than the spacing between iron atoms so it goes in and forms a solid solution-thus deforming the structure of iron.
The iron-carbon equilibrium diagram (phase diagram) is a plot of transformation of iron with respect to carbon content and temperature.
this admixture of carbon leads to several changes in its properties -stress bearing and ductileness etc.
If one observes the metallurgy of steel in detail related to its various phases your question can be handled-
its better you see a site which handles your querry...
ref; <http://nptel.ac.in/courses/105106112/1_introduction/2_metallurgy_of_steel.pdf>