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Thick wear-resistant steel plates are commonly used in demanding conditions, such as in the mining industry. In harsh environments, a high degree of both toughness and hardness is required, which extends the service life of the components but also makes the production of the plates difficult. Flame cutting is a generally applied cutting method in the heavy steel industry since it enables the cutting of thick steel plates at high production rates. However, flame cutting may cause cracks in the cut edge of the steel plates, leading to rejects for the steel industry and end-users. In addition, cutting generates a heat-affected zone at the cut edge, where volumetric and microstructural changes and hardness variations take place. A steep thermal gradient, generated during flame cutting, also produces high residual stresses on the cut edge. The goal of this study is to examine how microstructural features contribute to the residual stress formation and cracking probability of thick steel plates. Specific microstructural features can make the plates prone to cracking and tend to produce undesired stresses during the cutting process. The residual stress profiles of flame-cut specimens were measured using the X-ray diffraction method. In addition, the mechanical properties of steel plates were evaluated. The microstructures of the cut edge and the base material were characterized by electron microscopy. Results indicate that the shape of the prior austenite grains has an effect on both the cracking probability and residual stress formation. Longitudinally oriented prior austenite grain boundaries combined with a high residual tensile stress state provide potential sites for cracking.