Herein, the effect of intercritical annealing time on the microstructure and mechanical properties of dual‐phase steel processed by large‐strain asymmetric cold‐rolling is studied. It is observed that the martensite islands are uniformly distributed in the ferrite phase in the microstructures of dual‐phase steels due to performing the asymmetric cold‐rolling before intercritical annealing treatment. As the intercritical annealing time increases up to 10 min, the fraction of martensite increases. By increasing the holding time and fraction of martensite, the carbon content of the martensite phase is decreased. The short‐term intercritical annealing eliminates the yield point phenomenon. However, intercritical annealing at 860 °C for 20 min leads to the reoccurrence of a yield point phenomenon. Increasing the intercritical annealing time to 10 min improves the yield strength to 505 MPa and ultimate tensile strength to 834 MPa. However, the strength decreases sharply after the holding time of 20 min. There is a perfect linear relationship between the mechanical properties and the fraction of martensite. Ductile failure is observed at the center of the fracture surfaces of dual‐phase steels while shear failure occurs at the edges of the fracture surfaces.