The physical background is presented for modeling the austenite decomposition during cooling with the computer program CATRAN (CAlculation of TRANsformation). The input parameters are the alloy composition, the austenite grain size and the cooling conditions. The model is based on the consideration of an alloy as a multi-component system whose structure is determined by the alloy thermodynamics and the transformation kinetics. The kinetics of polygonal and Widmanstatten ferrite, bainite and pearlite formation is modeled with regard to the present theoretical knowledge. Paraequlilibrium concept is accepted. A distinct feature of the model is treating, where possible, the transformation kinetics with regard to actual microstructure peculiarities of the transformation products. The model reliability is discussed on the basis of a comparison of predicted and measured steel structures for the wide range of industrially rolled strips.