The changes of precipitate and microstructure during hot band annealing were studied by transmission electron microscope (TEM) and electron back scatter diffraction system (EBSD). The results show that a lot of precipitates precipitate during hot rolling and hot band annealing. The precipitates are mainly MnS and a little of MnS-AlN composite in hot-rolled band, while there are mainly AlN and a little of MnS-AlN composite in annealed hot-rolled band. The amount of precipitates in annealed hot-rolled band is 1-2 order higher than those in hot-rolled band, and the average size in annealed hot-rolled band is about 16 nm smaller than those in hot-rolled band. The microstructure of hot-rolled band is heterogeneous along the thickness and the Goss orientation grains with an intensity of about 2 are mainly in the deformed structures of subsurface. After hot band annealing, the microstructure along the thickness is more homogeneous and uniform and fine grains of subsurface can be obtained, but the intensity of Goss texture decreases to about 0.8.