The recrystallization behaviour of IF steel during continuous annealing has been examined throughout the process by SEM and OIM. In partially annealed specimens, recrystallization frequently was observed in the interiors of deformation banded gamma grains. As predicted by the deformation banding theory, the splitting of orientations of deformation banded (DB) grains is often parallel to RD and therefore, rolling plane sections give better information of orientation gradients in DB grains. OIM revealed that during the early stages of recrystallization, {111} deformed material recrystallized first at the deformation bands which contain <111>//ND deformed volumes. Grain boundary nucleation happens mainly at the boundaries of gamma-gamma grains and therefore favours the formation of gamma recrystallized grains. A recrystallized grain impingement model has been proposed to explain how the 5similar to7mum diameter recrystallized grains "break out" of their confining original hot band grain boundaries to consume the remaining deformed volume. Grain impingement allows a "nucleus" of sufficient length to bulge out and continue to grow until it becomes spherodised. This also gives an explanation for the enhancement of {111} texture in the later stages of recrystallization. Also implied is that only these larger grains can invade the alpha grains, which is in accordance with the observation of many workers that alpha begins to be consumed when the process is about 70% complete.