One main reason for the use of Fe-Cu-C system in PM industry is the presence of liquid phase (copper) at the start of sintering (1120oC). The diffusion of liquid copper into iron causes swelling in the structure. This in turn can cause high dimensional change and, if not controlled properly, may cause distortion. So it is of paramount importance to control the copper diffusion. Carbon, added as graphite, reduces the swelling of copper by changing the dihedral angle. The affect of graphite on copper diffusion depends on the graphite type, particle size of graphite and heating rate. The aim of this work was to find the influence of graphite type and particle size of graphite on copper diffusion. Water Atomized iron (ASC100.29) produced in Höganäs AB was taken as the base powder.  Two types of graphite were used each with two different particle sizes. Two different graphite quantities (0.2% & 0.8%) for each type was taken. Natural fine graphite (UF4), Natural coarse graphite (PG44), Synthetic fine graphite (F10) and  Synthetic coarse graphite (KS44) were the graphites used in this work. Powders were compacted at 600 Mpa and the sintering was done at 1120oC for 30 minutes in 90/10 N2/H2. Dilatometry and metallographic investigation of the samples sintered in the production furnace were used to understand the graphite influence.   The investigation showed that at low graphite levels (0.2%), the affect of graphite type or graphite size was not significant on copper diffusion. At high graphite levels (0.8%),  synthetic graphites were more effective in reducing the swelling of copper. Influence of  particle size of synthetic graphites on Cu diffusion was not significant compared to the influence of particle size of natural graphite. There was also a considerable affect of heating rate on graphite dissolution and copper swelling.