The effects of microstructure and deformation mode on the formability have been investigated to understand and improve formability in twinning-induced plasticity (TWIP) steel. The tensile and wire drawing behaviors were compared using the ferritic, pearlitic, and TWIP steels. The drawability of ferritic and pearlitic steels was quite good in spite of the low tensile elongation of hot-rolled state, whereas TWIP steel showed a low drawability despite the extraordinary tensile elongation. In TWIP steel, the gradual increase in twin volume fraction with increasing strain with the aid of grain rotation increased the ductility by delaying the growth of a local necking to fracture, which is the main reason why TWIP steel had a higher elongation during tensile test. The local saturation of deformation twins due to the inhomogeneous plastic deformation during forming process led to the earlier fracture in TWIP steel. For example, the earlier saturation of deformation twin at surface area led to earlier fracture of drawn wire, resulting in low drawability. This proposed fracture mechanism well explained the lower formability and higher strain hardening rate in TWIP steels under the complex stress states such as wire drawing, cup forming, caliber rolling, hole expansion, and dome stretch. To improve the formability in TWIP steels, twinning rate needs to be delicately controlled with area during plastic deformation, especially complex forming process. Four strategies were proposed to improve the formability of TWIP steels, which can help in producing high strength products using TWIP steels.