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Powder metal based copper steels have found increased use in automotive applications, an example being powder-forged connecting rods. A characterization study was conducted to determine the effects of carbon content and manganese sulphide addition on the mechanical properties and machinability of these materials. Steel powder mixes containing 2% Cu and various graphite contents, with and without a MnS addition were pressed, sintered and forged to full density. Forged samples were then tested for tensile properties, hardness and fatigue strength. Machinability was determined by measuring tool life during drilling tests. It was found that increasing the carbon content from 0.28 to 0.69% has little effect on fatigue properties of powder-forged copper steels although the tensile, strength increased as expected. The addition of manganese sulphide did not affect the mechanical properties measured, but was found to significantly improve the machinability.