With cold work, mechanical strength (measured either by yield strength or ultimate tensile strength) increases and ductility (measured by elongation, reduction of area, or fracture toughness) normally decreases. This chapter discusses the mechanisms that produce these changes and the factors that influence them. It explains how cold working increases dislocation density and how that affects the stress-strain characteristics of steel, particularly the onset of deformation. It describes the effects of deformation on ferrite, austenite, cementite, and pearlite, and how to optimize their microstructure for various applications through controlled deformation. It also provides information on subcritical annealing, the examination and control of texture, the use of optical microscopy to monitor the effects of recrystallization, and the effect of cold working on threaded fasteners, nails, and filaments used to manufacture cords.