<p>This study investigates the evolution of microstructure and mechanical properties in a cold-rolled dual-phase Fe₄₀Cr₄₀Ni₂₀ medium entropy alloy consisting of face-centered cubic (FCC) and body-centered cubic (BCC) phases, following annealing at different temperatures. The solid solution state alloy encompasses the FCC phase within the BCC phase. After cold rolling and annealing at various temperatures, the same microstructural transformation that all alloys undergo can be summarized as follows. The original BCC phase transforms into a non-recrystallized BCC phase with a different chemical composition, accompanied by short strip-shaped FCC phases and long strip-shaped recrystallized BCC phases. The final evolved structure of the original FCC phase consists of an FCC matrix with Cr-rich BCC particles. The strength of the alloy decreases with increasing annealing temperature, primarily influenced by the volume fractions of FCC and BCC phases, residual dislocation strengthening post-annealing, grain refinement, and back stress arising from the heterogeneous structure. Ductility is mainly determined by the continuity of the soft region. These findings offer valuable insights and technical considerations for the design of dual-phase alloys with enhanced properties.</p>