Laser processed tool steels present a metastable structure generally containing martensite and an extremely large proportion of retained austenite as compared to conventionally treated steel, which affects considerably the properties of the material. In rapid tooling by laser powder deposition, as consecutive layers of material are deposited to generate a 3D object, the material in previously deposited layers is submitted to successive thermal cycles, which destabilise retained austenite, leading to its transformation to martensite. Also, the martensite present in these layers will progressively decompose by tempering when the material is reheated. As a result, the properties of the material are progressively modified as the object is built-up. The evolution of the microstructure and properties of tool steels during laser freeform manufacturing is extremely difficult to study experimentally, due to the complexity of the transformations involved and the heterogeneity of the material and of the applied thermal field, hence modelling presents clear advantages in the optimization of part build-up strategy. In the present work, a model of the phase transformations resulting from the successive overlap of clad layers based on the coupling of finite element calculations of the time-dependent temperature distribution with transformation kinetics is described. The model was used to predict the evolution of properties and final property distribution in a martensitic stainless steel component produced by laser powder deposition.