Industrial annealing of automotive steel grades is carried out in order to improve the mechanical properties and to adjust the grain size. However, the surface chemistry changes drastically due to selective oxidation and segregation phenomena, which significantly influence the further surface treatment, i.e. hot dip galvanizing.The paper discusses results of laboratory experiments on selective oxidation and segregation of minor alloying elements Mn, Al, Cr and Si and non-metallic elements B, P and S during annealing of steel sheets in an N2–5%H2 atmosphere as a function of dew point. It will be shown that at lower dew points mostly external oxidation of Al and Mn occurs, where B shows a high tendency to segregate to the free surface and to form a BN film, especially observed on ferritic/austenitic steel. With increasing dew point, the oxidation of Al becomes internal and Mn, Si and Cr are oxidized externally. Boron also segregates to the surface by forming mixed Mn–B oxides and in the case of ferritic steels suppresses Si segregation and oxidation. The formation of phosphates by segregation of P becomes important at a D.P. of 0°C.