Continuous casting is a well-established process to produce steel slabs. However, the surfaces of the slabs may crack during processing. The occurrence of cracks is related to different phenomena, i.e., ferrite formation, presence of precipitates, and microstructural modifications during manufacturing processing. In the present work, we developed a physically based mesoscale model to describe the plastic deformation of micro-alloyed steel in the single and two-phase fields, as well as the microstructure evolution. We implemented a dislocation density-based constitutive model to calculate the strain hardening and the stress softening produced by dynamic recovery using the Kocks-Mecking (KM) formalism for the austenite and ferrite. We coupled the KM model with the Johnson-Mehl-Avrami-Kolmogorov model to consider the dynamic recrystallization of the austenitic phase. The nucleation and growth of the recrystallized grains, driven by the stored energy, compete with the annihilation of dislocations due to dynamic recovery. In the two-phase domain, the iso-work condition for the load partition is implemented. We calculated the ferrite volume fraction by fitting the data obtained using JmatPro software. Moreover, an Arrhenius-type equation correlates the yield stress to the Zener-Hollomon parameter. We validated the model with isothermal uniaxial compression tests of microalloyed steel over the temperature range of 650 °C-1100 °C and strain rates of 10−2 s−1 and 10−3 s−1 using a Gleeble® 3800 thermomechanical simulator.