Evidence of novel steel-making was found in a number of small cast-iron fragments recovered by the Mongolia-American archaeological survey of eastern Mongolia. These iron artefacts come from medieval period habitation and manufacturing sites and they consistently display irregular surface features characteristic of a solidification reaction from a partially molten state. Their microstructure consists of large near-spherical islands of pearlite spread on a background of fine white cast-iron eutectic. Reflected in this peculiar structure is an extremely small-scale steel-making process where one or more small pieces of cast iron were heated above the eutectic temperature for rapid decarburization in the partially molten state. We provide a detailed account of the technological aspects of this micro-scale steel-making method as observed in the microstructure and chemical composition of the objects examined. This small-scale technology was ideally suited to the pastoral nomadic way of life that characterized medieval eastern Mongolia; however, it probably would not have been appropriate for sedentary communities with access to large-scale urban manufacturing centres. Based on this observation, we discuss the role of nomadic lifeways and associated political environments that likely influenced the development of this innovative steel-making technique.