Previous researches indicated that the mechanical property of dual phase steel is not only depended on the volume fractions and grain sizes of ferrite and martensite but also the morphology and distribution of martensite island. Therefore, it is desired to obtain dispersive distribution of fine martensite islands in the matrix of fine grained ferrite. Generally, there are two methods to refine ferrite grain. First, γ/α dynamic transformation is promoted by increasing austenite free energy through heavy deformation at low temperature region. Second, fine ferrite grain is achieved by refining the initial austenite grain which can be obtained by microalloying, recrystallizing and cyclic heat treatment. In this paper, a low carbon Nb-microalloyed steel was cyclic-heat-treated to obtain 4.2 μm sized initial austenite grain and then cooled to different temperatures (810-720 ℃) to compressively deform. The effects of deformation temperature on flow stress curve, and the morphologies and distributions of ferrite and martensite island, two constituted phases in the steel, were investigated. The flow stress curves possess peak stress which increases first and then decreases with decreasing of deformation temperature. And the volume fraction of ferrite also decreases first and then increases with decreasing of deformation temperature, but the change is slight. At the lowest deformation temperature of 720 ℃, the size of ferrite grain was decreased to 2.8 μm and the volume fraction of fine martensite island which is dispersively distributed around the boundaries of ferrite was increased up to 22.7%. The inhomogeneity of the hardness of ferrite grains lowers with increasing of deformation temperature, and the hardness approaches a small stable value at last. The EBSD orientation maps show that the fraction of low angle grain boundary increases with decreasing of deformation temperature.