The development of delta-ferrite recovery sub-structures in low carbon steels has been observed in-situ utlhsing laser scanniJlg confocal microscopy (LSCM). Well developed subboundaries with interfaCial' energies much smaller than that of delta-fen'ite grain boundaries fOfmed following transformation from austenite to delta-fen'ite on heating. Transfonnatioll stresses associated with the austenite to delta-fenite phase transt'onnation generate dislocations that subsequently recover into sub-boundaries by a process of polygonisation. Experimental evidence in suppol1 of this proposal was found in a ferritic stainless steel. Thermal cycling through the high temperature delta-ferrite/austenite/delta-fel1'ite phase b'ansformation leads to the development of a strong recovery substructure, wh.ich in turn. modifies the low temperature austenite decomposition product from WidmansUilten/bainite to polygonal fen'ite, with a commensurate chauge in hardness.