The article deals with the influence of annealing parameters on evolution of microstructure and mechanical properties of dual phase steel. Dual phase steel was annealed in laboratory conditions according to the three chosen cycles of annealing: into intercritical region (780°C), into austenite region (920°C) and into austenite region (920°C) by subsequently cooling into intercritical region (780°C) with the hold at the temperature of 495°C. Simulation of annealing regimes by thermo-mechanical simulator Gleeble was done. The obtained microstructure consists from three phases: ferritic matrix, martensite and martensite/ bainite grains. For the microstructure identification the TEM and nanoindentation experiments were performed.