When plastic deformation is given to a pearlite steel, misfit strain generates between cementite and ferrite accompanying phase stress. Inhomogeneous plastic flow also takes place due to different [hk1] orientions of blocks resulting in generation of block stress as well as presumably due to different directions of lamellae in a bolck, colony stress. Neutron diffraction enables us to determine the phase stress and the block stress averaged within a whole specimen and to obtain some information on lamellar stress. In situ neutron diffraction measurements were carried out during tensile testing for variously heat-treated ferrite-cementite steels and the above internal stresses yielded by the inhomogeneous plastic deformation are discussed focusing on their effects on the yield strength and work hardening. The effects of volume fraction and shape of cementite on flow stress are well understood from the phase stress.