ABSTRACT This paper focuses on the third-generation automobile steel with good tensile strength and elongation of hot-rolled 0.13%C–5.4%Mn by quenching and reverse-phase transformation annealing in the two-phase region. The results indicate that the main component of microstructure after quenching is lath martensite. The microstructure after reverse-phase transformation annealing are ultra-fine grained ferrite, martensite and different forms of austenite microstructure. When the annealing temperature of reverse-phase transformation raises to 650°C, there are dislocation entanglement and dislocation pinning of Nb,Ti carbides. Meanwhile, the grain sizes of ferrite and austenite are 0.19 and 0.34 μm, respectively. At 675°C, the austenite appears in the ferrite grain boundary and martensite lath boundary in the shape of blocky and lath, respectively. The blocky austenite grain size is 0.65 μm. The optimum comprehensive mechanical properties are obtained at 930°C with 20 min quenching and annealing at 675°C with 30 min. The tensile strength is 1050 MPa, the elongation is 25% and the tensile strength and elongation reach 26.3GPa%.