Effect of austenite as a harder second phase on ferrite substructure evolution by intercritical rolling has been investigated using 0.12C-0.3Si-1.35Mn steel. Slab was reheated at 780°C (ferrite; α + austenite; γ phase region) and rolled with 90% reduction down to 12mm in thickness using laboratory mill. 700°C (ferrite; α + cementite; θ phase region) rolled plate was also prepared to compare with 780°C rolled plate. Microstructure distribution along the plate thickness has been observed in detail by SEM and EBSD. Microstructure showed mixed structure of fine-grained ferrite and elongated ferrite for both of the plates. The ratio of fine-grained ferrite region was around 50% at the plate surface, however, fine-grained ferrite formation hardly occurred at mid thickness for 700°C rolled plate. FEM analysis revealed that fine-grained ferrite distribution along the thickness can be well explained by equivalent plastic strain distribution along the plate thickness for 700°C rolled plate. Equivalent plastic strain showed maximum value near the plate surface due to shear strain component, and it could help substructure evolution and fine grained ferrite formation. On the other hand, the ratio of fine-grained ferrite region reached to 50% all through the thickness for 780°C rolled plate. Austenite as a harder second phase seems to promote ferrite substructure evolution even at mid thickness of the plate.