It is reported that the toughness and safety margins of the SA106 Gr.C main steam line piping steel is reduced due to dynamic strain aging (DSA) at the reactor operating temperature for Leak-Before-Break (LBB) application. In this study, intercritical annealing in two-phase ($alpha$+${gamma}$）region was performed to investigate the possibility of improving the toughness and reducing DSA susceptibility. The manifestations of DSA were still observed in the tensile tests of the annealed specimens. However, the ductility loss caused by DSA was smaller than that in the as-received material. Furthermore, the intercritical annealing was able to increase the Charpy impact toughness by 1.5 times compared to as-received. With the heat treatment, we could obtain microstructural changes such as the cleaner retained ferrite, increased ferrite content and somewhat finer grain size. It is considered that the reduced DSA was induced by cleaner retained ferrite, which in turn resulted in higher impact toughness in addition to the general toughening due to finer grain sizes and increased ferrite content.