This study investigates the role of intercritical annealing temperature on microstructural characteristics, mechanical performance, and wear resistance of DP1000 steel. As-received DP1000 steel samples in cold-rolled conditions were subjected to intercritical annealing between 730 and 880 °C with an interval of 30 °C, followed by water quenching. After heat treatment, the specimens were characterized by X-ray diffraction (XRD), scanning electron microscopy (SEM), mechanical tests consisting of hardness, impact, and tensile tests, and dry sliding wear tests. The findings revealed that equiaxed ferrite grains replaced elongated ones, and the martensite ratio increased from 21% up to 64% with increasing annealing temperature. Due to the formation of equiaxed grains, the impact strength was at least doubled for each specimen by heat treatment, reaching a peak value (9.55 J/cm2) at 760 °C. The hardness (311 HB) and tensile strength (1007 MPa) of the as-received sample were higher than that of the annealed steels up to 820 °C. The mechanical strength of the samples improved at 850 and 880 °C by approximately 10%, and accordingly, the lowest wear rate was obtained at the specimen annealed at 850 °C. The increase in temperature up to 880 °C caused a decrease in wear resistance due to excessive brittleness.