Abstract: The effect of manganese sulfide (MnS) inclusions and gadolinium–sulfide (Gd–S) inclusions on the deformation behavior of steel matrix at different stages was studied by in-situ tensile experiments using a scanning electron microscopy (SEM) at room temperature. Two in-situ tensile experiments of tensile force along the elongation direction of inclusions and perpendicular to the elongation direction were conducted. The hole-induced nucleation mechanism of different tensile directions and inclusion types during the tensile deformation process was revealed. When the tensile direction of the steel without Gd was parallel to the forging elongation direction, the tensile strength was 454 MPa. Meanwhile, long strip MnS inclusions were broken and shed, forming long strip holes perpendicular to the fracture direction. When the tensile direction was perpendicular to the forging elongation direction, the gap between long strip MnS inclusions and the steel matrix was expanded into a long strip hole parallel to the fracture direction, and the tensile strength was 402 MPa. Anisotropy of the steel was induced by long strip MnS inclusions. In the steel with a total gadolinium (T.Gd) content of 730 ppm, the tensile strength was 468 MPa when the tensile direction was parallel to the forging elongation direction. The tensile strength of the steel was 446 MPa when the tensile direction was perpendicular to the forging elongation direction. The addition of Gd in the steel was beneficial to improve the tensile properties of the steel and reduce the anisotropy of the steel.