Abstract: A full-sectional microstructure characterization method was developed to investigate the formation of coarse slag rims during the continuous casting of hypo-peritectic steel. The cross-sectional microstructural analysis of typical slag rims for two highly crystalline powders revealed that their formation was primarily driven by the solidification of the liquid slag. Distinct differences were observed in the microstructures of slag rims from the two powders. Powder A (characterized by a higher breaking temperature and viscosity) displayed alternating lamellar microstructures of coarse and fine phases, with the coarse phases composed of akermanite–gehlenite transition phases. In contrast, powder B (with a lower breaking temperature and viscosity) predominantly comprised regular akermanite–gehlenite crystals interspersed with a certain amount of glassy phases. Numerical simulations of a three-phase fluid flow coupled with heat transfer indicate that slag rim formation correlates with mold oscillation. Solidification of the liquid slag at the slag rim front predominantly occurs during the negative stroke of the mold oscillation. The average heating rate during the ascending stage of the mold reaches approximately 100 K·s⁻¹, whereas the average cooling rate during the descending stage attains 400 K·s⁻¹. This temperature variation leads to the formation of lamellar microstructures, whereas the ascending stage promotes the formation of coarse structures and thicker slag rims. Based on the powder properties, two distinct formation pathways exist for highly crystalline mold powders. For the powders with a higher breaking temperature, higher viscosity, and narrower solidification range (powder A), coarse microstructures and thicker slag rims were preferentially formed. For powders with lower breaking temperature and viscosity and wider solidification ranges (powder B), the liquid slag resisted rapid solidification, and the extended mushy zone allowed the partial liquid slag to persist at the slag rim front, promoting the formation of a thin slag rim. This study enhances the understanding of slag rim formation in highly crystalline mold powders and provides critical insights into the control of longitudinal surface cracks in hypo-peritectic steel.