Oxidized MC carbides which act as main crack initiation sites in a polycrystalline superalloy under thermal-mechanical fatigue (TMF) conditions at 850°C were studied. Microstructural observations in the TMF tested specimens were compared to findings from bulk samples exposed isothermally in air at 850°C for 30 hours in the absence of any external applied load. Carbides were found to oxidize rapidly after exposure at 850°C for 30 hours resulting in surface eruptions corresponding to oxidation products, from where micro-cracks initiated. Plastic deformation due to volume expansion of the often porous oxidized carbides led to high dislocation densities in the adjacent matrix as revealed by controlled electron channeling contrast imaging. The high dislocation density facilitated the dissolution kinetics of c¢ precipitates by segregation and diffusion of chromium and cobalt along the dislocations via pipe diffusion, resulting in the formation of soft recrystallized grains. Atom probe tomography revealed substantial compositional differences between the recrystallized grains and the adjacent undeformed c matrix. Similar observations were made for the TMF tested alloy. Our observations provide new insights into the true detrimental role of oxidized MC carbides on the crack initiation performance of polycrystalline superalloys under TMF.