In the industrial low-temperature grain-oriented (LTGO) silicon steel normalized sheet, there are a certain number of fine equiaxed grains distributed along the rolling direction. However, the formation mode of the fine equiaxed grains and the influence of them on magnetic properties have not yet been well understood. In the present work, the above issues were investigated using field emission scanning electron microscopy (SEM), field emission transmission electron microscopy (TEM), X-ray diffraction (XRD), high temperature confocal scanning laser microscopy (HTCSLM), etc. It was found that (1) the fine equiaxed grains could be divided into many grain colonies according to grain orientation, and within each colony, the grain orientations were similar; (2) during normalizing, the fine equiaxed grains were mainly generated inside the elongated deformed grains which contained a large number of subgrains; (3) the amount of α → γ phase transformation during the normalizing was very small. Therefore, it can be inferred that the fine equiaxed grains were mainly produced by subgrain coalescence, rather than by phase transformation. Moreover, γ-grain (〈111〉 // ND) colonies with ideal grain size could be formed in the fine equiaxed grain regions after ideal normalizing process. Due to the heredity of microstructure and texture, γ-grain colonies, which can facilitate the formation of the precise Goss texture ({110} 〈001〉 ) during high-temperature annealing, were formed in the primary recrystallized matrix after cold rolling, decarburizing and nitriding, as a result, the magnetic properties of the final product were significantly improved. The present work can provide help to further improve the understandings of the microstructural evolution in the LTGO silicon steel normalized sheet and the influence of normalized microstructure on magnetic properties.