Utilization of chromium as an alloying element for water atomized steel powder improves cost and performance efficiency for PM steels. However, presence of Cr puts strict demands on the component manufacturing process due to high oxygen sensitivity of chromium. Hence its effect on surface oxide distribution is of vital importance for the tailoring of the sintering process. A number of experimental steel powders, alloyed with 0 to 4 wt.% of chromium, were prepared by water atomization with subsequent annealing in lab-scale equipment. Powder manufacturing process conditions were kept the same for all the powders. The effect of chromium content in the powder on the surface oxide layer thickness and distribution of particulate oxides features on the powder surface was studied by XPS and HRSEM+EDX.