A novel heat treatment, rapid transformation annealing (RTA) is introduced, which uses the refining effect of the phase transformation during recrystallization annealing. The RTA is comprised of rapid heating including the full or partial phase transformation of cold-rolled, nonrecrystallized, or partly recrystallized a microstructure to c microstructure combined with subsequent rapid cooling to ambient temperature. In this way, a substantial grain refinement compared to conventional industrial annealing of cold-rolled strip can be realized. Minimum homogeneous grain sizes of 2.3 lm are produced in microalloyed high-strength low-alloy (HSLA) steels. A plain low-carbon steel shows despite any microalloying grain sizes of about 2.5 lm. Grain refinement results in a substantial increase in strength and in a pronounced strain hardening in the H IV stage. Simultaneously, the uniform and total elongation slightly decrease, which is a physical consequence of Conside`reÕs instability criterion. By a refinement from 4.2 to 2.3 lm, the yield and tensile strength of a HSLA grade can be increased by about 130 MPa to 535 and 650 MPa, while the total elongation is reduced by about four percentage points to 21 pct, i.e., a still moderate formability is provided. In general, the ductility-strength relationship remains similar to the conventional behavior. For all investigated steel grades, the HallPetch (HP) relationship is fulfilled. Furthermore, it is proved that RTA cycles can be realized in pilot scale as far as induction heating devices are applied.