It is well known that microstructural changes occur in a steel bearing, when the bearing is operated under conditions involving high cyclic stresses. When combined with relatively high temperatures, such microstructural changes result in the flaking of the bearing raceway. In this paper, microstructural changes that occurred during rolling contact fatigue were investigated, and the relationship between these changes and fatigue life are discussed in association with the recrystallization behavior of martensite. Conventional bearing steel SUJ2 (SAE52100) was subjected to partial solution treatment at 1133K for 2.4ks followed by oil quenching. The quenched material with a martensitic structure was tempered at 443K for 7.2ks, and then subjected to rolling contact fatigue testing. The testing was performed at temperatures ranging from 373K to 443K and surface pressures of 4.6GPa or 5.5GPa. During testing at 373K, flaking occurred from the surface of the raceway due to non-metallic inclusion and without any marked microstructural changes. On the other hand, in the case of testing at 403K or more, flaking occurs after obvious microstructural changes. Firstly, dark etching constituent (DEC) formed around the area of maximum shear stress, which was followed by the formation of white etching constituent (WEC) within the DEC at 80 and 30 degrees to the rolling direction. TEM observations showed the change from martensite lath to dislocation cell structure within the DEC, and also the existence of fine ferrite grains of 20nm through 100nm within the WEC. Arrhenius plots for the fatigue life indicated that the activation energy of the fatigue process corresponded to that of carbon diffusion in bcc ferrite. These results suggest that rolling contact fatigue originated from the WEC is controlled by the diffusion of carbon in the ferrite matrix.