Dual phase (DP) steels were modeled using 2D and 3D representative volume elements (RVE). Both the 2D and 3D models were generated using the Monte-Carlo-Potts method to represent the realistic microstructural details. In the 2D model, a balance between computational efficiency and required accuracy in truly representing heterogeneous microstructure was achieved. In the 3D model, a stochastic template was used to generate a model with high spatial fidelity. The 2D model proved to be efficient for characterization of the mechanical properties of a DP steel where the effect of phase distribution, morphology and strain partitioning was studied. In contrast, the current 3D modeling technique was inefficient and impractical due to significant time cost. It is shown that the newly proposed 2D model generation technique is versatile and sufficiently accurate to capture mechanical properties of steels with heterogeneous microstructure.