In this work, the effect of hot band annealing on subsequent microstructure, toughness and final magnetic properties of non-oriented electrical steel was investigated. It was found that the hot band annealing temperature plays an important role in the microstructure, toughness, texture and final magnetic properties. After hot band annealing, the grain size of hot-rolled and final annealed steels were increased, which made contribution to the reduction of iron loss. Besides that, hot band annealing could enhance the favorable θ-fiber texture and weaken the unfavorable γ-fiber texture of the final annealed steel. The magnetic induction B5000 of final annealed steel increased with the increasing of hot band annealing temperature within the testing range. In addition, the coarsening grain size caused by high hot band annealing temperature leaded to a sharp decrease in toughness of the hot-rolled steel. An increase in test temperature would improve the impact toughness of hot-rolled steel after hot band annealing. When the test temperature rose to 100 °C, ductile fracture occurred in all the hot-rolled steels under the hot band annealing condition of 850–950 °C.