Friction force is generated during the generation of green compacts from metal powder, which obviously gives adverse effect to the mechanical properties and microstructure of the green compacts. In this study, fine carbon powder is used to minimize the interparticle as well as die wall frictions and as alloying element hence high density yet defect-free near-net shape or net shape mechanical components can be produced. Powder forming at elevated temperature is a relatively new technology hence the effect of carbon content is not fully explored yet. Therefore, a lab scale warm compaction rig is designed and fabricated which enabled the generation of green compacts at different forming load and temperature. The powder mass was prepared by mechanically mixing iron ASC 100.29 powder with different weight percent of fine carbon powder for different duration of time. The prepared powder mass was formed at different compaction temperature to generate green compacts for the purpose of mechanical testing and microstructure evaluation. The results revealed that the mechanical properties and microstructures of green compacts are affected by the carbon content, mixing time, as well as forming temperature. From this study, the suitable carbon content, mixing time, and forming temperature are identified for the production of high quality mechanical components.