Abstract: Microstructure evolution in eutectoid steel during warm deformation in the temperature range from 600 to 700℃ was investigated by simulating hot compression test, SEM and thermomagnetic measurement. The effects of deformation and subsequent annealing on the spheroidizing of pearlite, refining of microstructure and dissolution of cementite were studied. The experimental resuits indicated that during warm deformation of eutectoid steel, pearlite lamellas fractured, cementite gradually spheroidized, and dynamic recovery and recrystallization of ferrite took place with fine dispersive cementite particles being precipitated. An increase in deformation temperature enhanced the above processes. Following annealing, the microstructure consisting of submicron-scale equiaxed ferritic grains and dispersive cementite particles became more homogeneous. Partial dissolution and re-precipitation of cementite during warm deformation were confirmed.