Laser Metal Deposition (LMD) is one of the promising processes for additive manufacturing thanks to its ability to produce practically large metallic parts and complex geometries in a cost-effective manner and short lead time. Moreover, it can be utilized for reparation and cladding, making it an outstanding choice for tooling and molding. In the current work, the heat treatment behavior of X35CrMoMn7-2-1 tool steel produced through LMD is studied using dilatometry. The as-built microstructure of parts mostly consists of partially tempered martensite due to high cooling rates and cyclic reheating during the deposition, along with considerable amounts (10%) of retained austenite (RA), which is a consequence of intercellular micro-segregation. The material’s responses to heat treatment in the as-built (AB) and quenched (Q) conditions are compared to evaluate the effect of microstructural homogenization and partial recrystallization of the microstructure after quenching. The hardness drops progressively in the Q samples by increasing the tempering temperatures, while the AB samples demonstrate a secondary hardening peak around 500˚C. Charpy impact toughness results follow a reverse trend compared to that of hardness as expected. The maximum Charpy toughness observed was 16J that related to the samples tempered at 575˚C.