By retarding transformation rates, moly improves the hardenability of its alloy steel grades.

Believe it or not, its name is from the Greek word for lead.

Molybdenum is an essential micronutrient, but large doses can be highly toxic. Fortunately, we don’t eat our alloy steels.
Molybdenum (“moly”) is added to constructional steels to

  1. Improve hardenability by slowing the transformation (moving the nose of the curve to the right);
  2. Reduce embrittlement during tempering
  3. Enhance the creep strength  of low alloy steel grades at higher temperature,
  4. Add resistance to corrosion.

Moly does this in very low quantities, and so it is truly a “synergistic” alloying element. Typical moly additions in constructional steels are around 0.10-0.60% by weight. Moly analysis typically runs 0.20-0.30 in the low hardening 40XX grades; 0.15-0.25 in the 41XX series of alloy steels; and 0.20-0.30 in the deeper hardening 43XX and 48XX steels.
Moly has been reported in Japanese swords as far back as the 14th Century, but its first major military use was for tank armor in World War I. The French firm  Schneider & Company made moly armor plate which at 25 mm was able to stop a direct hit from a shell. The prior manganese armor plate at 75mm thick was not so impervious and  the reduction of steel mass by about 2/3 made the tanks with moly armor much more mobile (speed and manuverable) in combat. Today moly is an indispensable part of many aerospace and high temperature applications including rocket nozzles.
While Moly can be the only alloying element added (40XX steels) it is also used in combination with Chrome (41XX) Nickel (46XX and 48Xx, or in a triple alloy combination  with Chrome and Nickel (43XX or 86XX) as well as other grades (87XX, 88XX,  and grade 9310 come to mind).
But where we see moly in our shops is in our M- series tool steels. That M prefix stands for Molybdenum, which gives these tools steels their characteristic high hot  hardness.  Moly content in M series tool steels ranges from 4.50% up to 9.50% by weight. It is the ability of these steels to resist softening at high temperatures that makes them so useful in our shops at production speeds and feeds.
The moly tool steels also have a tendency to decarburize so careful grinding and attention to details in heat treatment is critical in toolmaking and sharpening.
For more info on Molybdenum, Click on the Mindmap for Molybdenum.
Photo of moly metal.
Trivia: the first commercial heatof Moly High Speed Steel was by Universal Cyclops in 1931. Grade AISI M1. They called it Motung for, you guessed it, MOly TUNGsten.