Dual phase steel consists of martensite embedded in a ferrite matrix. The material experiences high heating and cooling rates during welding, which alter the microstructure significantly. In this work the effects of solid state phase transformations on the prediction of residual stresses and distortion during welding of DP600 steel is investigated. Phase fractions have been calculated implicitly using continuous cooling time (CCT) diagrams. The results of the model are compared with experimental measurements for bead-on-plate welds made on DP600 sheets. It is found that the volume changes and the increase of the strength due to the martensitic transformation have both a significant effect on the residual stress and distortion level although in opposite directions. Martensitic phase transformations in DP600 steel tend to reduce tensile residual stresses in the weld metal.