There are many works on annealing process of SPDed bulk metals but there are limited works on annealing process of SPDed sheets. Therefore, in this study the annealing response after constrained groove pressing (CGP) of low carbon steel sheets has been investigated. These sheets are subjected to severe plastic deformation at room temperature by CGP method up to three passes. Nano-structured low carbon steel sheets produced by severe plastic deformation are annealed at temperature range of 100 to 600 °C for 20 min. The microstructural changes after deformation and annealing are studied by optical microscopy. The effects of CGP strain and annealing temperature on microstructure, strength and hardness evolutions of the nano-scale grained low carbon steel are examined. The results show that annealing phenomena can effectively improve the elongation of process sheets with preserving the hardness and mechanical strength. Also, a thermal stability of microstructure can be observed with annealing at a temperature range of 375–425 °C and 400 °C is achieved as an optimum annealing temperature. Microstructure after post-annealing at temperatures of higher than 600 °C shows abnormal grain growth.