Transmission electron microscopy (TEM), optic microscopy (OM), and small-angle-X-ray-scattering(SAXS)are combined to comprehensively characterize the effect of endogenous nano-particles obtained by a new method, on microstructure and mechanical properties of the ferritic steel. Morphology of nano-particles, the change of microstructure, and the performance of steel are systematically studied. Results indicate that the endogenous nano-particles are titanium oxide which not only has a positive effect on refining the structure of ferrite steel, but also can significantly improve its strength without much losing its plasticity. Tensile tests reveal that tensile strength and yield strength of the investigated steel are increased from the original 392 and 247 MPa to 524 and 430 MPa, respectively. However, the value of the elongation-to-failure is only decreased by 3%, reached to 25% ultimately.