The influence of ferrite-martensite microstructural morphology, volume fraction of martensite, epitaxial ferrite on the tensile behaviour of dual-phase steels, was studied. It was observed that increasing the martensite content and its aspect ratio raised tensile strength and ductility. Epitaxial ferrite in rolled material strongly reduced the strength and improved the ductility, suggesting that substructure strengthening of material, as well as increased stress transfer to the hard phase, contribute to the strength of thermo-mechanically processed material. Mettallographic analysis of deformed samples revealed that void nucleation occurs predominantly along the ferrite-martensite interface. The void density in the necked region increased towards the fracture surface in all samples and was higher for samples which exhibited localized necking.