Dual phase steels were produced by quenched from intercritical temperature (780℃) after 0%-68% cold working at room temperature. A study has been made on the change of austenite morphology, the annealing time for dissolving cementite into austenite at intercritical temperature, and the mechanical prorerties of the dual phase steels. High strength and good ductility was acquired by annealing highly cold worked steel for a short time. At this time the martensite structure was fine. The annealing time for dissolving cementite into austenite was shorter in ferrite-pearlite structure than in spheroidized structure. The ductility of dual phase steel was improved when the undissolved cementite was little. The mechanical properties of dual phase steel were influenced by the volume fraction, the size, and the shape of martensite and undissolved cementites. The best combination of strength and ductility was obtained when the specimen with the reduction rete 68% was annealing for 15 min and then quenched.