Molecular dynamics (MD) simulation has been used to study the martensitic transformation in iron at the atomic scale. The paper reviews the available interatomic interaction potentials for iron, which describe the properties of different phases present in that system. Cases on the fcc-to-bcc transformation in iron by MD simulations were included in the present paper. Factors affecting the fcc-to-bcc transformation in iron were analysed: (a) structural factors, such as grain/phase boundaries, grain sizes and stacking faults; (b) simulation conditions, such as the presence of free surfaces, external stress/strain and studied temperatures; (c) the interatomic interaction potential. The main emphasis of the present paper is on results giving insight on the mechanisms of the nucleation and growth of bcc phase in iron. This review was submitted as part of the 2016 Materials Literature Review Prize of the Institute of Materials, Minerals and Mining run by the Editorial Board of MST. Sponsorship of the prize by TWI Ltd is gratefully acknowledged.