Effect of NbC distribution on mechanical properties has been investigated in 60ppmC and 0.1%Nb bearing grain-refined IF high strength steel, which exhibits lower yield ratio than conventional ultra low carbon IF high strength steels despite of fine grain microstructure. In this unique high strength steel, PFZ is observed in the vicinity of grain boundary by TEM. By reducing the heating rate at annealing, yield strength largely decreased and n-value in the early stage of deformation increased correlated with the increase in the volume fraction of the PFZ. Effect of the PFZ on yielding and work-hardening behavior is discussed in view of the dislocation morphology.