Microstructure and tensile properties of ferritic Fe-8Al-5Mn-0.1Nb lightweight steels with different C contents (0.005, 0.02, and 0.05 wt.%) have been investigated in the present study. It shows that the microstructure becomes more elongated along the rolling direction, i.e., increasing propensity towards unrecrystallization with an increase in C content. This is mainly due to the effect of NbC on retarding the dynamic recrystallization of ferrite during hot rolling, which is active for higher C (0.02C and 0.05C) containing alloys. In the case of the 0.05C alloy, there is an additional precipitation of κ-carbide particles, which also retard the dynamic recrystallization of ferrite during hot rolling, resulting in a much more elongated structure in the 0.05C containing alloy than in the 0.02C alloy in as-hot rolled condition. Although κ-carbide particles retard the dynamic recrystallization of ferrite during hot rolling, they play an opposite role during final annealing, i.e., promoting static recrystallization by the operation of particle-stimulated nucleation mechanism, resulting in the development of homogeneously distributed fine grains in the 0.05C alloy. As a result, the 0.05C alloy shows higher strength and larger elongation than the lower C containing alloys.