Cold-worked alloys exhibit high strength, but suffer from limited ductility. In contrast, Ti-based gum metal was reported to exhibit high strength combined with good ductility upon severe pre-straining. Motivated by this anomaly, we systematically studied the evolution of gum metal microstructure during severe cold working (swaging and rolling) and the resulting deformation and damage micro-mechanical mechanisms during follow-up tensile deformation. To this end, various experimental in situ and post-mortem methodologies are employed, including scanning electron microscopy imaging, high-resolution electron backscatter diffraction mapping and transmission electron microscopy. These observations reveal that intense grain refinement takes place through dislocation plasticitydominated deformation banding upon cold working. The observed enhancement in crack blunting and failure resistance which prolongs the post-necking ductility of gum metal during follow-up tensile straining can be attributed to the deformation-induced development of local heterogeneities in texture and grain size.