The effect of inter-lamellar (IL) spacing on the microstructure and texture of severely cold-rolled and annealed pearlite was studied. For this purpose, the behavior of fine IL spacing starting material (FILSM) (~ 190 nm) was compared with a coarser IL spacing starting material (CILSM) (~ 275 nm). The materials were severely cold-rolled to 95 pct reduction in thickness and annealed at 973 K (700 °C) for different time intervals. Despite similarities in microstructural evolution featured by progressive alignment of the pearlitic colonies along the rolling direction (RD), bending and kink morphologies, fragmentation of cementite, and deformation-induced nanoscale structure, the FILSM showed a smaller nanoscale IL spacing (~ 45 nm) than CILSM (~ 60 nm) after severe cold-rolling. Both FILSM and CILSM showed similar deformation texture featured by the presence of typical ND (// <111>) and RD (// <110>) fibers. Annealing of the severely cold-rolled materials resulted in an ultrafine microduplex structure. However, annealed FILSM consistently showed lower ferrite and spheroidized cementite sizes than those in the annealed CILSM. Irrespective of the starting IL spacing, continuous recrystallization was found to be the softening mechanism, which was amply corroborated by the texture evolution during annealing. Therefore, although the starting IL spacing considerably affected the microstructure, the texture evolution remained largely unaffected. The tensile behavior of the microduplex structured FILSM was further analyzed considering Hall–Petch (H–P) and Orowan–Ashby (O–A) strengthening mechanisms.