The A508-III steel is widely used to manufacture the lower heads of commercial reactor pressure vessels (RPV). In severe accident, the reactor core in the RPV begins to melt and meanwhile the technology of in-vessel retention (IVR) exerts its role. In this case the inner surface of RPV will expose to temperatures over a phase transition temperature. However, the significant nonlinear feature of creep curve of A508-III steel suffered heterogeneous damage was not studied. In this work, the creep tests were performed for the steel at the phase transition temperature of 800°C. The microstructural evolution at different creep stages was characterized by scanning electron microscopy and transmission electron microscopy. The results show that, at the second creep stage, more coarsening second phase particles occur in the steel. With the creep processing, the grain size and diameter of second phase particles increase. At the tertiary creep stage, the grain size increases significantly, and the second phase particles coarsen during the process of atom migration. In addition, Micro-cracks and voids also come into being in the situation and they can become larger by combing each other during the creep process. At this stage, the growth of cavities and second phase particles coarsening become the main mechanism of creep damage. The trend of microstructural evolution is consistent with the creep constitutive equation obtained for the A508-III steel at the phase transition temperature of 800°C. The results obtained provide indispensable foundation to establish the relationship between the macroscopic creep and microscopic damage.