The UOE process is used for cold forming of large diameter steel line-pipes. Pipe strength has been found to increase (work hardening) or decrease (Bauschinger effect) after the UOE process compared to the plate depending on the steel grade, plate and pipe processing history. The steel chemistry, through the presence of microalloy precipitates, and prior processing, through the size and distribution of microalloy precipitates and presence of retained work hardening, affects the magnitude of the Bauschinger effect. In this paper the microstructures of two (Nb and Nb–V alloyed) steel plates, in terms of (Nb,V)(C,N) particle distributions and dislocation densities, have been related to the Bauschinger parameters in the as rolled and annealed initial conditions. The Bauschinger stress parameter increases with microalloy particle number density and dislocation density increase and the relative importance of the two effects is discussed.