Abstract Torsion testing was carried out on a plain carbon steel to study ferrite grain refinement during warm deformation within two-phase (α + γ) region. Fine ferrite grains development was analyzed by using optical microscope and EBSD technique. Microstructural analysis shows that with increasing strain the new fine equiaxed ferrite grains surrounded by high angle boundaries start generating at the initial boundaries and the volume fraction of fine grains is increased and that of work hardened grains decreased. It was seen that there is no evidence of discontinuous dynamic recrystallization. Thus, it is suggested that the occurrence of continuous dynamic recrystallization is responsible for the formation of new fine ferrite grains.