An experimental investigation has been conducted with respect to the decomposition of austenite to various ferritic products from different initial phase states (molten-state of 1550 °C and solid-state of 1050 °C) and pre-defined cooling rates (1 °C/s and 10 °C/s) in a typical low-carbon steel using the confocal laser scanning microscope (CLSM). Surface morphology, microstructure, internal stress and dislocation density were analyzed. Changing the initial states from the molten to the solid state and lowering the cooling rate from 10 °C/s to 1 °C/s increased the phase transformation starting temperature. Compared with the uniform cooling condition to produce polygonal ferrite of the solid-state sample, unevenly distributed internal stresses were found from the initial molten-state sample. Additionally, high dislocation densities were observed in stress concentrated areas of the initial molten-state samples resulting in the formation of lath-like ferrite but coarse quasi-polygonal ferrite in relatively stress-free areas. Moreover, when the cooling rate was increased to 10 °C/s, the proportion of lath-like ferrite obviously increased in the molten-state and the size of the polygonal ferrite decreased in the solid-state sample due to the increasing of nucleation rate from austenite to ferrite.