The metallic binder phase dictates the toughening behavior of WC-Co cemented carbides (hardmetals), even though it occupies a relative small fraction of the composite. Studies on deformation and phase transformation of the binder constituent are scarce. Grinding represents a key manufacturing step in machining of hardmetal tools, and is well-recognized to induce surface integrity alterations. In this work, metallurgical alterations of the binder phase in ground WC-Co cemented carbides have been assessed by a combination of electron back scattered diffraction and transmission electron microscopy techniques. The Co-base binder experiences a martensitic phase transformation from fcc to hcp crystal structure, predominantly in the first 5 mu m below the surface. The hcp fraction decreases gradually along a depth of 10 mu m. Surface Co displays severe plastic deformation under the highest strain, resulting in formation of nanocrystalline grains in the first micrometer below the surface. Microstructural refinement within the binder phase is observed even at greater depth. Stacking faults were detected in most of the refined grains. The metallurgical alterations of the binder phase modify the local stress distribution during grinding, which affects the discerned subsurface microcracking. The resulting residual stress profile is the sum of multiple subsurface changes, such as phase transformation, severe plastic deformation and grain refinement, where it is discerned that the depth profile of the transformed hcp-Co fraction coincides with the grinding-induced residual stress profile.