In　this　paper,　the　grain　size　effect　on　martensite　transformation　and　its　mechanical　properties　were　investigated　in　two　high-carbon　steels.　The　results　show　that　grain　refinement　can　induce　a　phase　transformation　of　high　carbon　martensite　substructure　from　twin　to　dislocations.　When　grains　are　refined　to　smaller　than　4　mu　m,　no　twin　could　be　observed,　instead,　full　dislocation　substructure　is　obtained.　And　the　martensite　substructure　transition　results　in　an　enhancement　in　mechanical　properties,　an　ultrahigh　tensile　strength　of　2.28　GPa　and　a　significant　elongation　of　6.8%　are　obtained　in　the　0.61　wt%C　steel.　A　model　based　on　the　relationship　between　dislocation　slip　stress　(tau(S))　and　twin　shear　stress　(tau(T))　with　grain　size　(d)　is　developed　to　explain　the　above　phase　transformation　phenomenon.　The　tau(T)　is　proportional　to　d(-1)　and　tau(S)　is　proportional　to　d(-1/2),　both　of　which　increase　with　reducing　grain　size,　but　tau(T)　is　more　sensitive　to　grain　size.　Therefore,　a　critical　grain　size　(d(c))　is　obtained,　at　which　the　stresses　for　twining　and　for　dislocation　gliding　are　equal,　lower　than　this　value　(i.e.　grain　is　finer),　the　stress　for　twin　is　higher　than　that　for　dislocation　gliding,　so　dislocation　slip　becomes　main　deformation　process　in　martensite　transformation.　The　theoretically　calculated　d(c)　is　about　2.7-7.6　mu　m,　which　is　in　good　agreement　with　the　experimental　results.　These　findings　may　provide　a　new　way　to　design　ultra-high　strength　and　high　ductility　steels.