Interstitial free (IF) steels are characterized by their interstitial free ferritic matrix due to addition of micro-alloying elements that draw carbon and nitrogen out of matrix to form carbonitrides. The IF steels typically have excellent deep drawing ability, certain mechanical strength, and high plastic deformation performance. In this paper, the microstructure evolution and carbides precipitation behavior during the hot rolling, cold rolling and annealing processes have been studied using both experimental and thermodynamic and kinetic modeling approaches. The strengthening mechanism of Nb–Ti microalloyed IF steel has been investigated. The results of the thermodynamic simulation indicates that the addition of Nb into Ti bearing IF steel promotes recrystallization at 900 °C, leading to fine recrystallized grains. Due to the recrystallization of austenite during the final rolling process, Nb–Ti microalloyed hot rolled plates exhibit finer grain size, fewer substructures, and lower dislocation density compared to the hot rolled plates containing only Ti. Building upon the initial fine and uniform structure, Nb–Ti microalloyed steel maintains a refined structure after undergoing cold rolling and annealing. The study of the carbides precipitation behavior suggests that TiN precipitates at high temperature above 1100 °C, while a substantial amount of (Nb,Ti)C and TiC precipitate at about 900 °C in Nb–Ti and Ti bearing steels, respectively. There is no significantly difference between the amount of carbides in steels hot deformed at 900 °C and in the hot rolled plates, indicating that the carbides mainly precipitate during the hot rolling process. There are negligible carbides precipitated during the coiling process at 600 °C. In Nb–Ti containing steel, Nb and Ti in solid solution are significantly reduced due to the large amount precipitation of (Nb,Ti)C during the final rolling process. The reduction of solid solution Nb effectively promotes the recrystallization of austenite. Therefore, the grains of hot-rolled, cold-rolled, and annealed strips are refined. In addition, there are more small size carbides in Nb–Ti bearing steel than that in Ti bearing steel. Therefore, the higher strength of Nb–Ti steel is mainly from the strengthening effect of grain refinement and carbides precipitation.