In order to get the controlled methods of microstructure homogenization and high strengthening-toughening combination by compact strip production (CSP) rolling, the dynamic recrystallization characteristics of each pass were obtained during CSP rolling using a Gleeble-1500 thermal mechanical simulator. Then, the CSP process was simulated by laboratory rolling experiment. Through thermal mechanical simulation experiment and laboratory rolling experiment, a design idea of Nb-bearing pipeline steel by CSP can be obtained as the following: the level of dynamic recrystallization behavior should be increased through the reasonable balance of high deformation temperature and deformation amount in F1 and F2 passes, and F3-F7 passes should be controlled in the austenite non-recrystallization zone. Finally, X65 pipeline steel with microstructure uniformity and good properties was produced by CSP. The yield strength is up to 497 MPa, the tensile strength is up to 563 MPa, the elongation is 30% on average, and the toughness is very good whose Charpy impact value is 110 J on average and drop-weight tear test shearing areas are all 100% at -60, -40, -20, 0, and 20℃.