Ultra-high strength steel (UHSS) sheet has been used in automobile structures for light weight and energy efficiency. The objective of this study is to investigate the characteristics of the heat softening phenomenon and its effect on the formation of welding residual stresses and deformation in UHSS lap joints. Firstly, the lap joints of 1180 MPa steel sheets were fabricated using the cold metal transfer (CMT) welding process, and obvious heat softening was observed in the tempered area by hardness measurement. Miniature tensile test shows that the heat softening zone has about 33% reduction in strength comparing with the base metal. To identify the softening temperature, the simulated thermal cycle experiment was performed by applying various thermal cycles to the 1180 MPa sheet. It was found that the softening zone corresponds to the range of peak temperature from 500 °C to 720 °C. Based on the in-house FEM code JWRIAN, heat softening was modeled and included in the numerical models of CMT welded lap joints. By the verification with measured data, more accurate simulation results were obtained by the numerical model considering heat softening behavior. It was found that there exist the compressive or small tensile residual stress in the weld zone due to low temperature solid-state phase transformation and large tensile residual stress in the heat softening zone. A combined out-of-plane deformation was observed in the 1180 MPa steel lap joint. The upper plate has a downward angular distortion and concave longitudinal deflection, while the lower plate is deformed in the opposite manner. The effects of plate thickness on the welding distortion and residual stresses in 1180 MPa steel lap joints were parametrically analyzed using the developed model.