The microstructure evolution of adiabatic shear bands (ASBs) in AISI 52100 produced under high strain rate impact loading was investigated by using scanning electron microscopy (SEM) and transmission electron microscopy (TEM). A full view of the shear band formation and development was presented. The results reveal that no strain hardening effect occurred in the AISI 52100 under the dynamic loading. Two distinct regions of the ASBs and the transition region were observed. Driven by the high shear deformation and assisted by a thermal softening effect, the formation of ASBs started in the core region under the dominant mechanism of dynamic recrystallization. It is followed by the formation of neighbouring region under the co-action of both dynamic recovery and dynamic recrystallization. Then the transition region formed which was controlled by dynamic recovery. The core region of ASBs was consisted of subgrains and fine equiaxed grains. The grains were refined either through partitioning and breaking down the elongated subgrains by entangled dislocations clusters or through splitting and rotating the elongated subgrains into small grains under a synergistic effect of shearing and twisting. The amount and size of cementites were greatly reduced in ASBs due to cementite dissolution induced by large plastic deformation and dynamic recrystallization.