Cold rolling with subsequent annealing of lath martensite structure could lead to the formation of nanostructures in low carbon steels. In the present work, the microstructural evolution of a 0.13% C steel during this process was studied. The specimens were austenitized at 950 degrees C followed by quenching in ice-brine to get martensitic structure. The quenched samples were aged at 200 degrees C for 30 min. These specimens were cold rolled up to 90% reduction in thickness without any intermediate annealing and then annealed at the temperatures from 400 to 600 degrees C. Scanning and transmission electron microscopy and color metallography was used to investigate the microstructure. Microscopic investigations showed that a multiphase nanostructure composed of equiaxed ferrite grains with the mean grain size of about 188 nm and small blocks of tempered martensite can be achieved under annealing at 400 degrees C for 90 min. Formation of the nanostructure was discussed from the viewpoint of characteristics of the martensite starting structure. Fragmentation of martensite lathes in cold rolling stage play an important role on recrystallization at annealing stage to get the ultrafine structure.