The effect of grain refinement of the strength and ductility of metallic materials is investigated. A model in which a single phase material is considered as an effectively two-phase one is discussed. A distinctive feature of the model is that grain boundaries are treated as a separate phase deforming by a diffusion mechanism. Deformation of the grain interior phase is assumed to be carried by two concurrent mechanism. Deformation of the grain interior phase is assumed to be carried by two concurrent mechanisms: dislocation glide and mass transfer by diffusion. The model was exemplified by simulating uniaxial tensile deformation of Cu down to the nanometer grain size. The results confirm the observed strain hardening behaviour and a trend for reduction of ductility with decreasing grain size at room temperature.