The effect of thermal-deformation treatment on the structure and physical and mechanical properties of the Fe–Ti–C metal–ceramic composite material, which is synthesized in situ from a Fe—86.0%, Ti—10.0%, and graphite—4.0% powder mixture, is studied. Titanium carbide (TiC) is a reinforcing phase, as it has high hardness (30 GPa), high melting point (≅ 3100°C), and low contact angle with iron (≅ 20°) that promotes the formation of a coherent bond at the phase boundary. The samples are fabricated by pressing under pressure up to 700 MPa, which reduces porosity to ≅ 6%, and sintered at Т = 1000–1050°C. As found out, a specific core–shell microstructure is formed in the material after sintering, where layers of TiC surround Ti grains in the composite. The thickness of the carbide layer is controlled by diffusion, and its growth at temperatures 1000 and 1050°C (from 5–10 mm to 10–15 mm, respectively) corresponds to the mechanism of diffusion along grain boundaries. The key stage of processing is hot forging of compacts at T = 1100°C. As determined, hot forging leads to significant microstructural changes: spherical TiC inclusions are deformed and elongated in the direction of metal flow that causes mechanical anisotropy of the properties. The forging affects significant deformation strengthening and the formation of cementite (Fe₃C). The cementite is revealed by x-ray phase analysis. In the forged samples, the combined effect of these mechanisms increases their hardness and compressive strength by ≅ 65–70% (up to 630.3 MPa). The highest hardness values are of 104–109 HRB, when combining the forging and water quenching processes. As shown, the formed heterophase structure of the Fe–Ti–C system combines a coherent adhesion between the hardening phase (Fe₃C) and the ductile steel matrix that contributes to increased wear resistance, while the hard Ti–TiC inclusions effectively localize the abrasive impact.