In order to comply with new regulations on safety and pollution, the automotive industry is constantly seeking for new alloys to reduce the weight of chassis, while increasing strength and ductility. Martensitic stainless steels (MSS) exhibit good strength, acceptable ductility and corrosion resistance, which make these alloys a valid solution for automotive applications. MSS for hot-stamping are heat treated in the austenitic range for few minutes and then quenched to room temperature. Other than martensite, residual ferrite is usually present after this process. The ductile damage mechanism of a martensitic stainless steel with 15 vol.% of residual ferrite and Cr-carbide particles is investigated using a combined multiscale experimental and modelling approach. A preliminary study reveals that Cr-rich carbides are preferential damage nucleation sites. Hence, three different heat treatments are applied to partially dissolve these particles while keeping the same ratio of ferrite versus martensite volume fraction. Surprisingly, ductility decreases with decreasing volume fraction of Cr-carbides. Nanoindentation mapping indicates that the strength contrast between ferrite and martensite increases with Cr-carbide dissolution. According to finite element simulations of strain partitioning inside the dual phase microstructure, the stress triaxiality in ferrite increases with the mechanical strength contrast. This promotes nucleation and growth of primary voids, which reduces the fracture strain. In addition, a statistical study of FE simulations reveals that there is a critical phase configuration that maximizes damage. Voids are more likely to initiate in channels of percolated ferrite aligned perpendicular to the main tensile direction and constrained by the surrounding martensite. The present understanding of the role of residual ferrite in MSS should enable the design of microstructure with enhanced mechanical properties