The mechanical properties of cold-drawn pearlitic wires are controlled largely by the microstructure developed during processing and, to some extent, by the residual stresses during drawing. The advent of powerful computers and the availability of equipment to perform diffraction experiments, have made possible numerical predictions and accurate measurements of residual stresses. This paper-a review of work done by the author and collaborators-shows how stress-relaxation losses, environmental assisted cracking and fatigue life of cold-drawn pearlitic wires are influenced by residual stresses. The role of pre-stretching loads, or of stress relieving treatments, on stress-relaxation can be understood when the profile of residual stresses is known. Some awkward results in times to fracture during hydrogen embrittlement tests can be explained if accurate values of residual stresses near the surface are known, and the same is true of fatigue life. In this context numerical simulations and measurements performed on cold-drawn pearlitic wires, with different profiles of residual stresses, have shown very good quantitative agreement. (C) 2004 Kluwer Academic Publishers.