The microstructures and mechanical properties of deformation induced ferrite (DIF) in the low carbon steel Q235 under different deformation temperatures have been investigated systematically. Through deformation induced ferrite transformation (DIFT), ferrite grain can be refined to 3 mu m and accounts for above 85% of the overall fraction. Yield strength of DIF (>500 MPa) is increased by up to 100% compared with the conventional low carbon steel. Comparison of microstructure and mechanical properties in the Q235 steel with DIF and tempered DIF microstructure illustrates that the strengthening mechanism of DIF microstructure is the combination of grain boundary strengthening and carbon supersaturated strengthening. Electron back-scattered diffraction (EBSD) analysis and high magnification scanning electron microscopy (SEM) observation denote that high-angle grain boundary among ultrafine ferrite grain and the transformation product of retain austenite membrane along ferrite boundaries are responsible for the stability of ferrite grain size during tempering process. Transmission electron microscopy (TEM) analysis demonstrates that the transformation product of retained austenite membrane between ferrite grain boundaries is cementite.