Residual stresses in cold drawn, pearlitic steel wire have been measured using synchrotron diffraction. In this paper the cementite residual stress evolution is presented. A saturation of the residual stress could be observed. A simple analytical model is proposed to interpret the observed residual stresses in terms of the strain hardening behaviour of the phases present in the material. From the analytical model it follows that it is not reverse plastic yielding of the ferrite that is of primary importance in residual stress saturation, but the actual strain hardening behaviour. The experimentally observed saturation, followed by a gradual decrease of the residual micro phase stress, could be explained by an exponential strain hardening of the ferrite, while the cementite phase doesn't show significant strain hardening.