Nanostructure surface layer was fabricated on a low carbon steel cylinder specimen by means of circulation rolling plastic deformation (CRPD), and the effect of annealing temperature on microstructure and properties of surface nanocrystalline structure was studied. The microstructure of the surface layer on the samples was observed by transmission electron microscopy and the microhardness variation along the depth was measured on the cross-sectional samples by using microhardness instrument. After CRPD treatment for 250min, the average grain size was about 10nm in the top surface layer and increased with an increment of the distance from the top surface. The surface nanocrystallization samples were annealed at 200°C, 300, 400°C and 500°C for 30min respectively. The nanocrystallization grain of surface layer did not grow for samples after annealed at 200°C and 300°C. After surface nanocrystallization by CRPD treatment the microhadness of top surface obviously increase from 220HV0.1 to 520HV0.1.