The formation of strain-induced ferrite was investigated in two low carbon steels and in a 0.036% Nb microalloyed low carbon steel at temperatures above the Ae3. Two distinct stages were observed, the first of which was characterized by the formation of Widmanstätten colonies with very fine plates of similar orientation. In the second stage, observed after further straining, the initial plates coalesced into polygonal ferrite grains. The transition from stage I to stage II was retarded by additions of carbon and niobium and slightly by an increase in strain rate. EBSD analysis revealed that the small misorientations (<1.5°) between Widmanstätten plates allow them to coalesce into grains. The 60° misorientations between some of the colonies suggest that they form from twinned regions of the parent austenite. A common characteristic of the polygonal grains is the presence of planar high angle boundaries, a feature inherited from the original Widmanstätten microstructure.