Directed energy deposition (DED) is a metal additive manufacturing technique, in which a focused energy source is used to precisely deposit material during the process to repair parts or create complicated metal components [1]. K340 tool steel, known for its excellent wear resistance, toughness, and strength, is widely used as dies and tools that require enhanced durability and performance [2]. Repairing damaged parts by powder-fed DED process gives such benefits as low and controlled heat input, rapid cooling rates, and minimal stress and distortion. As powder of K340 steel is not commercially available, in this study the powders were produced by vacuum induction gas atomization (VIGA) process. The VIGA process involves melting the alloy in a crucible under vacuum conditions and subsequently atomizing it with high-pressure gas. Understanding the atomization process and its impact on the resulting powder properties can improve the processability of the alloy by additive manufacturing processes and lead to fabricated parts with enhanced properties. The produced powder was sieved and characterized by different techniques. The concentration of the alloying elements was studied by energy-dispersive X-ray spectroscopy (EDS) and C, O, and S were analyzed by LECO, and the results were in great agreement with the material specification. The morphology of the powder particles was investigated by electron microscopy. The results showed spherical particles with some satellites attached, mainly to bigger particles. It is also well-known that the cooling rate can affect the microstructure and the possibility of dendritic to cellular growth. Additionally, the relative density of the particles was high, which was measured by gas pycnometer. The cross-section investigation confirmed that, regarding the internal defects such as gas porosity, high quality powder is produced showing negligible gas pores in the particles, even in those having a diameter of more than 100 µm. These pores are inevitable in gas atomization process [3] and atomizing parameters, such as melt temperature and gas pressure, have great impact on the fraction of internal pores caused by the entrapped gas. Regarding the chemical composition of the powder, it was in good agreement with the starting material, and the oxygen content tends to increase by increasing particle size, which is related to the increase in the surface to mass ratio.