The formation of a favourable recrystallization texture in interstitial-free (IF) steels depends on the availability and activation of particular nucleation sites in the deformed microstructure. This paper presents a description of the deformed microstructure of a commercially cold-rolled IF steel, with particular emphasis on the microstructural inhomogeneities and short-range orientational variation that provide suitable nucleation sites during recrystallization. RD-fibre regions deform relatively homogeneously and exhibit little short-range orientational variation. ND-fibre regions are heavily banded and exhibit considerable short-range orientational variation associated with the bands. While the overall orientational spread of ND-fibre grains frequently is about the ND-axis, the short-range orientational variation often involves rotation about axes in the TD-ND plane that are nearer to the TD than the ND.