The microstructure evolution and tensile properties of the Fe–10Mn–10Al–0.7C low-density steel annealed at the temperature range from 700°C to 1200°C for 1h were investigated in the present study. The phases in the annealed specimens mainly included ferrite (α), austenite (γ) and κ-carbide (κ). The dissolution temperature for κ-carbide is between 850°C and 900°C. At the annealing temperature of 700°C, all the γ phase transformed to α phase and κ-carbide by eutectoid reaction. As the annealing temperature rose from 700°C to 900°C, α phase and κ-carbide fraction decreased and γ phase fraction increased, and ultimate elongation increased, while ultimate strength and yield strength had a decreasing trend. The γ phase fraction in the specimen dominated the ultimate elongation, and the κ-carbide strengthened the specimen and weakened ductility. As the annealing temperature rose from 900°C to 1200°C, the phase fraction change was small but the grain size increased greatly. The rapid growth of the grains was the main reason why ultimate tensile strength and ultimate elongation decreased with the increase of annealing temperature over 900°C. The steel designed here possessed a density of 6.80g/cm3, which is about 13% lower than pure iron.