The authors simulated the industrially used continuous annealing conditions to process dual phase (DP) steels by using a custom designed annealing simulator. Sixty-seven percentage of cold rolled steel sheets was subjected to different processing routes, including the conventional continuous annealing line (CAL), intercritical annealing (ICA), and thermal cycling (TC), to investigate the effect of change in volume fraction, shape, and spatial distribution of martensite on tensile deformation characteristics of DP steels. Annealing parameters were derived using commercial software, including thermo-calc, jmat-pro, and dictra. Through selection of appropriate process parameters, the authors found out possibilities of significantly altering the volume fraction, morphology, and grain size distribution of martensite phase. These constituent variations showed a strong influence on tensile properties of DP steels. It was observed that TC route modified the martensite morphology from the typical lath type to in-grain globular/oblong type and significantly reduced the martensite grain size. This route improved the strength–ductility combination from 590 MPa–33% (obtained through CAL route) to 660 MPa–30%. Finally, the underlying mechanisms of crack initiation/void formation, etc., in different DP microstructures were discussed.