The influence of cold rolling reduction on microstructure and mechanical properties of the TWIP (ttwinning induced plasticity) steel was investigated. The results indicated that the steel had better comprehensive mechanical properties when cold rolling reduction was about 65.0% and the annealing temperature was 1000℃. The tensile strength of the steel is about 640MPa and the yield strength is higher than 255MPa, while the elongation is above 82%. The microstructure is composed of austenitic matrix and annealing twins at room temperature, at the same time, a significant amount of annealing twins and stacking faults are observed by transmission electron microscopy (TEM). Mechanical twins play a dominant role during deformation, and result in excellent mechanical properties.