Fe-B-C system is a well-known alloy system for a liquid phase sintering (LPS), but a continuous network of hard and brittle solidified phases formed along the grain boundary is detrimental to the mechanical properties. For the improvement of ductile property, molybdenum (Mo) was introduced in Fe-B-C alloy system to modify the grain boundary microstructure through the formation of two Fe-Mo-B and Fe-B-C eutectic phases. For this, Fe-x-Mo-0.4B-0.8C (x = 1.0-5.0 in wt%) alloys were prepared by LPS and their microstructure and mechanical properties were investigated. With Mo addition, the matrix grain changed from pearlite and re-precipitated ferrite to pearlite (or pearlite/bainite) and the grain boundary changed from a continuous network to a lamella structure composed of MoFe(C,B) (WCoB-type boride) and (Fe,Mo)(3)(C,B) (Fe3C-type carbide). As a result of microstructure modification, the mechanical properties such as hardness, tensile strength, and elongation to failure were significantly improved. In particular, Fe-5Mo-0.4B-0.8C alloy exhibited a high tensile strength of 674 MPa and a high elongation to failure of 4.92%.