Carburized steel grades are widely used in applications where high hardness at the surface is required in combination with good core toughness as well as high fatigue resistance. The process of carburizing lower to medium carbon steel can generally provide this combination of properties and has been practised for several decades. Such steel is very essential in vehicle power-trains. The carburized 18CrNiMo7-6 pinions are ground to obtain high dimensional precision after the carburization, quenching and tempering heat-treatment process. During the grinding process, thermal damage is developed due to the high localised heat energy at the contact zone of the grinding wheel and pinion. The developed thermal damage is known as grinding-induced burn. The burns are observed when the temperature reaches above the tempering range (i.e. 210 ̊ C) and the intensity of the grinding-induced burn is in relation to the thermo-mechanical effects of the grinding process. The nital etch process is used to identify the burns using ISO 14104:2017 standard and the process detects using the discolouration developed on the burn site caused by the chemical attack. The information about the intensity of detected burns are not known in the nital etch method. However, the intensity of the grinding-induced burns can be measured using magnetoelastic parameter of Barkhausen Noise (BN) technique which functions in relation to the microstructure and stress state of the material. The present study aims to investigate microstructural features of grinding-induced burns of varying BN intensities, to evaluate the service life testing of the thermally damaged pinions and the effect of varying grinding parameters on the generation of grinding-induced burns. The microstructure characterization is done by optical microscope, Vickers hardness, scanning electron microscope, X-ray diffraction and correlate the obtained results with the BN signals. The increased pinion speed and reduced grinding cycles are observed in the favouring of increasing localized heat input at the contact zone of grinding wheel and pinion causing the BN signals to increase. 3 samples of varying intensities of grinding induced burns are detected using BN and are characterized. The obtained results gave a good correlation with the Barkhausen noise signals. As the heating rate at the grinding contact zone increased above the tempering range, the BN signals also increased due to the enhanced domain wall movement with the softer microstructure which is observed due to the retained austenite decomposition and carbon diffusion from the tempered martensitic phase. The further increase in temperature above the austenitization range led to the re-hardening burn. The freshly formed structure is brittle and hard untempered martensite at the surface surrounded by the softer tempering burn which might be detrimental during the pinion functioning. The axle test results of the tempered burn pinion observed the transformation of retained austenite to martensitic structure during the cyclic loading which eventually enhanced the surface properties by increase in hardness from 621 HV1 to 676 HV1 at 0.1 mm depth and generating -600 ± 6.6 MPa compressive residual stress due to the volume expansion. This transformation resulted in the grinding induced burn pinion to survive the axle test without failure.