The mechanisms of shear band formation in IF steel after cold rolling to $50% reductions have been investigated using transmission electron microscopy. The observations revealed that shear bands were always parallel to a second set of microbands, where these exist, and contained within individual crystals, indicating that shear banding is controlled by orientation. Crystallographic analysis revealed that shear banding involves two mechanisms, dislocation glide and rigid-body rotation. In the first step, dislocation glide causes a rotation about the h211i axis to produce the so called 'S' band, which gives the shear band its crystallographic character. In the second step, when the most heavily stressed slip plane parallel to the shear band is of the form {110}h111i, rigid-body rotation continues about the h211i axis in the sheared zone and, then, a rotation about the transverse direction (TD) is promoted by the geometry of the sample. Using rigidbody matrix theory, the calculated orientations of shear bands are shown to be in agreement with experimental observations. The process outlined is capable of explaining how slip processes in grains that contain microbands, using either {110} or {112} slip planes, can produce crystallographic shear bands.