The characteristics of erosion pits on a carbon steel surface were investigated at the incipient stage of cavitation erosion. After a 5-minute experiment performed in an ultrasonic vibration system, needle-like erosion pits appeared on the polished steel surface, and a specially affected zone was formed around the pit. The shape of the pit and the plastic deformation of the affected zone indicate that the mechanical impaction on the surface is the main reason for the cavitation damage. On the other hand, the iridescent color, the decreased surface hardness and the precipitated carbides on the affected zone prove that the affected zone has experienced a tempering process with the temperature higher than 300°C. The lack of oxygen in the affected zone also proves that it is not a chemical oxygen result. A special phenomenon that a carbon ring forms in the affected zone is explained as a result of the toroidal bubbles’ heating effect at the final stage of the bubble collapse.