This study investigates the relationship between the initial microstructures of Nb bearing low-carbon steels and their microstructural evolution during subsequent intercritical annealing. The initial microstructures of specimens P, B, and M comprised ferrite/pearlite, bainite, and martensite, respectively. In the specimen lacking of Nb, the time for ferrite recrystallization during annealing decreased in the order of M > P > B. Recrystallized ferrite grains in specimen M are fine and equiaxed. The ferrite-to-austenite phase transformation during intercritical annealing occurred more rapidly in specimen M than in specimens P and B. The high austenite fraction in specimen M is presumably caused by the large number of austenite nucleation sites due to the ferrite grain refinement. In the Nb bearing specimens, the time for ferrite recrystallization decreased in the order of M > B > P. The Nb addition retarded the ferrite recrystallization and accelerated the ferrite-to-austenite phase transformation. The high austenite fraction in the Nb bearing specimen is presumably caused by the large number of austenite nucleation sites owing not only to the ferrite grain refinement, but also to the increased number of non-recrystallized ferrite grains.