A physically based mathematical model for prediction of steel behavior and microstructure evolution during thermo-mechanical processing (TMCP) is under development at the Swedish Institute for Metals Research (SIMR) in co-operation with the Swedish steel industry. The model evaluates simultaneously the nucleation and growth of recrystallized structure and precipitation in parallel with dislocation density changes. The model includes several interactional submodels for dislocation density change, recrystallization and precipitation. The dislocation density change is described as a competition between dislocation generation by deformation and dislocation structure recovery. The precipitation of carbonitrides is described as a typical nucleation and diffusion controlled growth process. Recrystallization is also described as a nucleation-growth process, but with different mechanisms and driving forces. Growth of recrystallized grains is driven by the stored energy, which is related to dislocation density. The model contains essential description of the metallurgical phenomena observed, and could be in principle adapted to different type of steels and alloys by changing some basic materials constants. The model was verified by laboratory simulation results for which HSLA steels and austenitic stainless steels were selected.