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The effects of heat treatment on the microstructure and mechanical properties of Mg-containing (7 ppm), low-carbon commercial steel (SS400) were investigated. Twenty different heat treatment paths were performed using a Gleeble 1500 thermomechanical simulator. It was observed by using an optical microscope that as the cooling rate increased and holding temperature decreased, the volume fractions of pearlite, Widmanstätten ferrite, and grain boundary allotriomorphs ferrite fell, whereas that of acicular ferrite (AF) increased. Quantifying the fractions of AF and other phases by using electron backscatter diffraction shows that the heat treatment path with a cooling rate of 20 K/s and holding temperature of 723 K (450 °C) induced the highest volume fraction (44 pct) of AF. As such, the toughness of the sample was increased 12.4 times compared with that observed in the sample containing 4 pct AF. Typical inclusions were analyzed using scanning electron microscopy (SEM) and energy-dispersive X-ray spectroscopy. The results showed that the magnesium-based complex inclusions could act as nucleation sites of AF. Inclusions with a size of about 5 μm can serve as heterogeneous nucleation sites for AF. Mg-containing SS400 steel also has excellent hot-ductility in the temperature range of 973 K to 1273 K (700 °C to 1000 °C), and the minimum percentage reduction in area (R.A pct) value of around 63 pct at 1073 K (800 °C). [ABSTRACT FROM AUTHOR]