Molybdenum DialkyldiThioCarbamate (MoDTC) is a friction modifier that has been used in automotive engines for many years. However, its exact decomposition mechanism within tribocontacts is not fully understood. In this study, an attempt has been made towards understanding the mechanism of MoDTC decomposition in steel/steel contacts by employing Raman spectroscopy. The results show that the main MoDTC decomposition products are MoS₂, FeMoO₄ and sulphur-rich molybdenum compounds, MoS_x (x > 2), in contrast to the previously reported MoS₂ and MoO₃. The formation of these products is dependent on tribological parameters. Raman results from this study indicate that the Mo⁶⁺ species previously observed in X-ray photoelectron spectroscopy (XPS) analysis are probably from FeMoO₄ and not MoO₃. This paper presents an alternative reaction pathway for MoDTC decomposition in steel/steel contacts with MoS_x as an intermediate product and MoS₂ as the final product. FeMoO₄ is formed from a side reaction of iron oxides with molybdenum compounds at low temperatures and low MoDTC concentrations. The results also show that friction is dependent on the nature of the decomposition products at the tribocontact. Knowledge of the MoDTC decomposition reaction pathway will enable the friction performance of MoDTC lubricants to be optimized.