The microstructure and precipitation mechanism of ultra-thinhot strip produced by CSP technology were analyzed by electron back scattered diffraction (EBSD), H-800 transmission electron microscope (TEM) and thermodynamics theory. The EBSD results show that the finishing hot rolling microstructures are mixture of recrystallized and deformed austenite. After phase transformation, ferrite grains embody substructures and dislocations that led ultra-thin hot strip high strength and relatively low elongation rate. TEM observations show that there are a lot of fine and dispersive precipitates in microstructures. Most of aluminium nitrides are in grains, while coexisted precipitates of MnS along grain boundaries. Coexisted precipitates compose cation-vacancy type oxides such as Al₂O₃ in the core, while MnS at the fringe of surface. At the same time, reasons for microstructure refinement and strengthening effect were investigated.