The purpose of this study is to understand in detail the micromechanical behavior of martensite and ferrite microphases in a medium‐Si 35CHGSA dual‐phase (DP) steel by varying the martensite volume fractions (MVF) and ferrite phase constituents. Light microscopy combined with microhardness measurements is supplemented by field‐emission scanning electron microscopy, electron backscatter diffraction, transmission electron microscopy, and X‐ray diffraction in order to evaluate the micromechanical behavior of martensite and ferrite microphases in relation to the evolving microstructure. The experimental observations illustrate that ferrite microhardness diminishes sharply from 352 to 217 HV5g with the change in ferrite volume fraction (FVF) from 3 to 13%, beyond which it increases abnormally to 245 HV5g with a further increase in VF to 15%. The martensite microhardness too varies significantly depending on the progress of ferrite formation in the intercritical range. The hardness drops with further increase in FVF as a result of longer holding times. These observations are rationalized in part to the mutual interaction of martensite with ferrite, and the variation of martensite and ferrite alloying concentrations, developed as a result of ferrite formation during intercritical holding at 720 °C.