Laser powder bed fusion (LPBF) facilitates economic advantages by enhancing cutting speeds of tools through the implementation of complex internal cooling channels that could not be fabricated otherwise. However, tool steels are prone to cracking during the cyclic remelting process with extremely fast cooling rates due to their high carbon and alloying element contents and related stresses. In this work, a correlation between microscopic crack patterns in a tool steel processed via LPBF, residual stress gradients, local microstructure and near-crack elemental concentrations is studied using longitudinal/transverse sectional synchrotron X-ray micro-diffraction, electron microscopy techniques and atom probe tomography. A formation of horizontal micro-cracks correlates with longitudinal/transverse sectional residual stress drops, especially at geometrically notched positions and sample edges. Remarkably, the cracks propagate predominantly along the network of eutectic intergranular carbides of type M 2C deposited at the grain boundaries of carbon martensite and retained austenite matrix. A comparison of representative carbide sizes at the crack surfaces and within the crack-free regions indicates that cracks propagate preferably through the carbides in a transcrystalline manner, whereas no correlation between the cracking and the martensite formation is observed. The observations link the crack propagation to the solidification microstructure and the prevailing eutectic network. Therefore, the stress-induced cracking of eutectic carbides, which formed during the solidification and fracture in the solid state due to tensile stress accumulations, was found as the predominant cracking mechanism of the tool steel during the LPBF process.