Cold metal transfer (CMT) welding is a new gas metal arc welding process having several advantages such as low heat input and spatter free welding. This makes it of great advantage in weld cladding applications. In this study, hardfacing of AISI H13 die steel with Stellite 21 alloy has been carried using CMT process. Coatings were deposited on H13 substrate in annealed as well as quenched & tempered (Q&T) condition at room temperature as well as with a preheat of 400 °C. The Q&T substrate with and without preheat and the annealed substrate without preheat were found to be susceptible to underbead cracking upon Stellite deposition. The cracking in the heat affected zone (HAZ) was due to formation of brittle martensite upon rapid cooling which is associated with formation of high tensile residual stresses at the bead toe. The annealed substrate with preheat of 400 °C showed the least cracking tendency. The cracking tendency was investigated by studying the variation of the microstructure and microhardness along the depth of HAZ. The dilution levels based on Fe content was found to be 3–4%, which was considerably lower than that of conventional arc welding deposits. The Stellite coated H13 plate (annealed with preheat) could be successfully subjected to quenching & tempering heat treatment to restore the properties of the substrate without introducing any defects. © 2017 Elsevier B.V.