Dendrite arm fragmentation is considered in solidification structure tailoring. Time-resolved and in situ imaging using synchrotron radiation X-rays allows the observation of dendrite arm fragmentation in Fe-C alloys. Here we report a dendrite arm fragmentation mechanism. A massive-like transformation from ferrite to austenite rather than the peritectic reaction occurs during or after ferrite solidification. The transformation produces refined austenite grains and ferrite-austenite boundaries in dendrite arms. The austenite grains are fragmented by the liquid phase that is produced at the grain boundary. In unidirectional solidification, a slight increase in temperature moves the ferrite-austenite interface backwards and promotes detachment of the primary and secondary arms at the δ-γ interface via a reverse peritectic reaction. The results show a massive-like transformation inducing the dendrite arm fragmentation has a role in formation of the solidification structure and the austenite grain structures in the Fe-C alloys.