X-ray and Electron metallography (SEM, OIM) has been used to examine the texture and substructure of warm rolled IF (Ti microalloyed Interstitial Free) steel and Low Carbon steel (LCS) after rolling reduction of 75% in a single pass at 700C. Although the rolling texture is similar for both the IF steel and LCS, the microstructure is very different. Very narrow in-grain shear bands only fractions of micrometers thick are quite common in IF steel and these make angles of 20-35 degrees with the rolling direction in the longitudinal section. On the other hand LCS produces no shear bands and the subgrain size is bigger than in the IF steel after the same rolling. Carbon in solution is obviously an important determining factor for shear band formation in high temperature rolling. Deformation banding is well developed in IF steel but not in LCS. On annealing, nucleation in the IF steel is associated with shear bands, deformation bands and grain boundaries, which almost always belong to the gamma fibre grains. The LCS, since it does not show such evidence of strain localization in the form of shear bands or deformation bands, reveals nucleation to be associated with grain boundaries. The macroscopic texture formed during static annealing at 700C is (111) for the IF steel, and is more random with small intensity along alpha fibre for the LCS. Partially annealed samples for both IF steel and LCS allow a detailed description of nucleation.