The effects of heating rate and annealing temperature on the microstructure and mechanical properties of cold rolled Al-Si, low C non-oriented electrical steels are investigated using SEM metallography and uniaxial tensile tests. The experimental results show that short term annealing at temperatures up to 850 °C result in microstructures consisting of recrystallized ferrite grains with sizes similar to those observed in industrial semi-processed strips subjected to long term batch annealing treatments. Within the temperature range investigated, the grain size increases and the 0.2% offset yield strength decreases with increasing temperature. It was observed that the rate of change of grain size with increasing temperature increases when annealing is performed at temperatures greater than Ac1 (~870 °C). This effect is attributed to Fe3C dissolution and rapid C segregation to austenite for annealing temperatures within the ferrite+austenite phase field. This leads to faster ferrite growth and formation of pearlite when the steel is finally cooled to room temperature. The presence of pearlite at room temperature decreases the ductility of samples annealed at T > Ac1.