Hot rolled 240MPa grade high strength IF steel sheet was used to study the effect of cold reduction ratio and annealing temperature on the microstructures and mechanical properties of experimental steel. The experimental results showed that the recrystallization has finished under different annealing temperature followed 75% to 85% cold reduction ratio. To the experimental steel of high coiling temperature, The yield strength, tensile strength ,elongation percentage, yield point elongation, the plastic strain ratio and strain hardening exponent were approximate 260MPa, 445MPa, 37.5%, 2.14%, 0.25, 2.0. To the experimental steel of low coiling temperature, that were approximate 235MPa, 369MPa, 38.8%, 1.73%, 0.26, 2.1. Therefore, the suggested the optimal annealing temperature is 840 °C, cold reduction ratio is 75%, and it obtains optimally match of high strength and punching property.