The effects of deformation strains and annealing temperatures on microstructures and mechanical properties of martensitic steels were examined. The amount of cold deformation was changed as 30%, 50% and 60%, and annealing temperatures varied from 500°C to 600°C. In samples cold rolled 30%, the dominant microstructure for an annealing at 500°C was dislocation substructures with uniformly distributed rod-shaped carbide particles. For an annealing at 600°C, the microstructure consisted of equiaxed ultrafine grains, spherical carbide particles and elongated dislocation substructures. A proper annealing temperature for martensitic steels received 30% reduction, showing a good combination of a high strength, 1230MPa, and an adequate total elongation. 9.4%, was found as 500°C.