The cold rolling of ultra low carbon steel is a complex process involving the formation of texture and the development of residual stresses. The mechanism for both texture and residual stress development is dislocation multiplication. Both texture and residual stresses can be determined by means of neutron and X-ray diffraction. In this paper, results of such measurements on a cold rolled plate (final thickness 10 mm) are presented along with theoretical predictions based on finite element calculations of the residual stress state. The results show that during cold rolling not only the formation and multiplication of dislocations play a role. It is seen that besides the creation of dislocations, two dislocation annihilation processes are involved, namely recovery and recrystallization. These happen despite the fact that the cold rolling takes place at relatively low temperatures (20 < T < 150 degrees C).