A brief summary is given of the desired effects of precipitation of microalloy nitrides and carbides in austenite and ferrite prior, during and after g−a transformation. Precipitation of microalloy compounds of Nb(C,N), TiC and V(C,N) is discussed in relation to several grain refinement and precipitation strengthening mechanisms. An improved understanding of the thermodynamics and kinetics of precipitation and phase transformations is presented using the approach based on the chemical driving force. Nucleation of intragranular polygonal ferrite on VN particles that grow in austenite and the formation of acicular ferrite inside the austenitic grains in Vsteels is described. The role of carbon in increasing the driving force for nucleation is elucidated and the benefits of using microalloy carbo-nitrides for precipitation strengthening of bainitic steels are reviewed. An expanded view on the role of microalloy carbo-nitrides in grain refinement and precipitation strengthening is presented.