The microstructure evolution during dynamic recrystallization and the deformation characteristics of a low carbon steel within the temperature range of 600-700℃ and a strain rate range of 10-3 to 10 s-1 have been investigated by means of thermal-compression simulation test, SEM, TEM and EBSD. In order to understand the effect of microstructure on dynamic recrystallization behaviour, two different microstructures were adopted, which consist of ferrite plus pearlite and ferrite plus fine cementite particles respectively. The results show that dynamic recrystallization takes place in these two cases. However, in the microstructure with pearlite higher strain is needed to start recrystallization and reach the steady state, comparing with the microstructure with fine cementite particles. The measurement confirms that ferrite with smaller grain size in steady state can be obtained in microstructure with ferrite and cementite, which indicates a more significant effect of separately distributed fine cementite particles on promoting recrystallization nucleation and hindering the grain growth than that of pearlite.