Plain low carbon steel produced by compact strip production (CSP) process was analyzed using TEM, EELS and XEDS. Nano-sized oxides and sulfides were observed in the steel. The nano-oxides are mainly ferrospinel of <20nm in size, and the nano-sulfides are MnS and FeS particles with size of 20-100 nm. They distributed both in grains and at grain boundaries. These nano precipitates could form in cast slab before heavy deformation by rolling process. It is proposed that besides the grain refinement, the nano-pricipitation plays an important role in yield strength enhancement. This mechanism may provide a new approach to strengthen plain low carbon steels.