Damascus steel is a type of steel that is easily recognizable by its wavy patterned design. It is a crucible steel forged from a single ingot from South India that develops a surface “water” pattern after being forged and thermal cycled. Damascus steel is highly valued for its hard and flexible nature while maintaining a sharp edge. Weapons forged from Damascus steel were far superior to those formed from just iron. The term "Damascus steel" can refer to two different steels: pattern-welded steel and crucible steel.

Pattern-welded steel is made by layering two or more different types of steel that are forged and welded together to make one solid block of steel. The patterns vary depending on how the steel is folded and twisted. This type of steel has been referred to as "Damascus steel" since 1973 when bladesmith William F. Moran unveiled his "Damascus knives" at the Knifemakers Guild Show.

Crucible steel, on the other hand, is made by heating steel to a high temperature and then applying pressure to the steel under a hydraulic press or hammer. The resulting steel is liquid, leading to a relatively homogeneous steel content with virtually no slag. The formation of dendrites is a typical characteristic of crucible steel. Identification of crucible "Damascus" steel based on metallurgical structures is difficult, as crucible steel cannot be reliably distinguished from other types of steel by just one criterion.

Ultimately, most of the Damascus steel available today is pattern-welded steel, made from several types of steel and iron slices welded together to form a billet. The term "Damascus" (although technically incorrect) is widely accepted to describe modern pattern-welded steel blades in the trade.