Central cracking in cross-wedge-rolled workpieces results in high wastage and economic loss. Recent cross-wedge rolling tests on two batches of steel showed that one batch formed central cracks, while the other was crack-free. The batches were both nominally of the same chemical composition and thermomechanical treatment history. In addition, both batches had passed all the standard quality assessments set for conventional forging processes. It was suspected that the different cracking behaviours were due to differences in microstructure between the two as-received steel billets, and the material in cross-wedge rolling (CWR) was more sensitive to the initial microstructure compared with other forging processes due to its specific loading condition including ostensibly compression and large plastic strain. Nevertheless, no previous study of this important problem could be identified. The aim of this study is, therefore, to identify the key microstructural features determining the central crack formation behaviour in CWR. The hot workability of the as-received billets was studied under uniaxial tensile conditions using a Gleeble 3800 test machine. Scanning electron microscope with energy-dispersive X-ray spectroscopy and electron backscatter diffraction was applied to characterise, quantitatively analyse, and compare the chemical composition, phase, grain, and inclusions in these two billets, both at room temperature and also at the CWR temperature (1080 °C). Non-metallic inclusions (oxides, sulphides, and silicates) in the billets were determined to be the main cause of the reported central cracking problem. The ductility of the steels at both room and elevated temperatures deteriorated markedly in the presence of the large volumes of inclusions. Grain boundary embrittlement occurred at the CWR temperature due to the aggregation of inclusions along the grain boundaries. It is suggested that a standard on specifying the inclusion quantity and size in CWR billets be established to produce crack-free products.