API steel is used for line-pipe to transport the oil and natural gas. As the recent trends in the development of API steel are towards the use of larger diameter and thicker plate, many researches have been studied to achieve higher strength, higher toughness and lower yield ratio in API steel. However, the strength of API steel after pipe forming is changed depending on the competition of the Bauschinger effect and work hardening which are affected by the strain history during pipe forming process. So, the purpose of this study is to investigate the influence of microstructure on the Bauschinger effect for API steel. To change the microstructure of API steel we have changed the hot rolling condition and the amounts of V and Cu addition. The compression-tensile test and the microstructure observation by OM and TEM were conducted to investigate the yield strength drop and the correlation between the Bauschinger effect and microstructure of API steel. The experimental results show that the increase of polygonal ferrites volume fraction increases the Baushcinger effect due to the back stress which comes from the increase of mobile dislocation density at polygonal ferrite interior during the compressive deformation. The hot rolling condition was more effective on the Bauschinger effect in API steel than the small amount of V and Cu addition.