Internal friction in hardened low-carbon nickel steel was measured with a torsion pendulum and an internal friction peak was observed around 155℃ with a frequency of vibration of about 2 cycles per second. The condition for the appearance of this internal friction peak is that the steel specimens contain martensite, alloying element and carbon. This internal friction peak has also been observed in chromium steel and chromium-nickel steel under suitable conditions. Systematic observations were made with steel specimens containing 29.7% Ni, and the height of internal friction peak was found to be proportional to the carbon content in the specimen. The experimental results mentioned above show that the new internal friction peak is associated with the stress-induced micro-diffusion of carbon in low-carbon alloy martensite.A preliminary model was suggested in which the carbon is assumed to be at the interstitial positions of 00(1/2) type. The presence of alloying atoms introduces an inhomogeneous distortion in the lattice, consequently the jumping probability of carbon atoms between two types of 00(1/2) interstial positions (Fe-C-Fe and B-C-Fe, where B represents an atom of alloying element) under conditions of thermal equilibrium is altered by the application of stress. Such a stress-induced movement of carbon atoms gives rise to internal friction. This model can explain qualitatively the observed experimental facts. A quantitative study on this subject is in progress.