A phase-field method, based on a Gibbs energy functional, is formulated for γ→α transformation in Fe–C. The derived phase-field model reproduces the following important types of phase transitions: from C diffusion controlled growth through Widmanstätten microstructures to massive growth without partitioning of C. Applying thermodynamic functions assessed by the Calphad technique and diffusional mobilities available in the literature, we study two-dimensional growth of ferrite side plates emanating from an austenite grain boundary. The morphology of the ferrite precipitates is defined by a highly anisotropic interfacial energy. As large values of anisotropy lead to an ill-posed phase-field equation we present a regularization method capable of circumvent non-differentiable domains of interfacial energy.