Abstract: A medium-carbon steel is provided having a dispersed fine spherical graphite structure, having high mechanical strength, good processability, and good machinability, and having fine ZrC functioning as nucleation sites for graphite. The medium-carbon steel having a dispersed fine spherical graphite structure is manufactured by providing a composition containing 0.1 to 1.5% Si, 1.0% or less C, and 0.01 to 0.5% Zr. After the composition or a material of the composition (ingot) has been hot-rolled, or after the hot-rolled steel has been heat-treated at 750 to 1300° C. for 0.5 to 10 hours (solution heat treatment) after hot-rolling, or after the hot-rolled and heat-treated steel has further been water-quenched to deposit fine ZrC particles in the matrix, the steel is subjected to graphitization treatment by heat-treating at a temperature of 740° C. or below for 0.5 to 100 hours to grow graphite using ZrC as the nucleation site.