The importance of deformed microstructure before transformation‐induced plasticity (TRIP) heat treatment in transformation‐induced plasticity steels was taken into account. The heavily cold‐rolled sheet was annealed at 650 °C for enough time to replace the deformed microstructure with a recrystallized one. It was revealed that the tensile strength, ductility, strain‐hardening capability, and TRIP effect are significantly impaired by the annealing of cold‐rolled sheets. This was explained based on the distribution of the retained austenite phase, strength of ferritic matrix, and the deformation‐induced martensitic transformation.