Effects of fine precipitates on the austenite (γ) grain structures were investigated in JIS SCM420-based case-hardening steels with several different concentrations of the micro-alloying elements and hot-forging temperatures. Micro-alloyed steels of 18Al (0.018 mass% Al) and 35Al–32Nb (0.035 mass% Al, 0.032 mass% Nb) were forging-simulated at 1 150°C or 1 250°C, normalized at 1 070°C, and carburized at 1 050°C. When the as-received 18Al steel was normalized and carburized without forging-simulated heating, a uniform γ grain structure was observed with the distribution of fine AlN precipitates. However, coarsening of AlN occurred when the forging-simulated temperature was 1 150°C and it caused abnormal grain growth during carburization. In 35Al–32Nb steel, the same heating did not induce the abnormal grain growth owing to the AlN–Nb(C,N) combined particles. The size of these particles increase with an increase in the forging-simulated temperature. The high forging-simulated temperature caused the dissolution of the fine precipitates, followed by reformation and coarsening of the precipitates during the subsequent cooling and the normalization heating, which resulted in a decreased pinning force and γ grain coarsening. Furthermore, TEM observations revealed that a considerable amount of Nb(C,N) particles exist near large eutectic MnS particles. Thermodynamic calculations based on the Scheil’s condition showed that the formation of these Nb(C,N) particles was due to segregation during solidification. It was suggested that such local concentration of the precipitate particles in the last solidifying region leads to ununiform distribution of the pinning force that may induce the abnormal grain growth.