Transformation kinetics of undeformed and deformed austenite during continuous cooling has been investigated on several industrial steels. Dimensions of both prior austenite grains and ferrite grains in ferrite-pearlite structures obtained for various states of parent austenite and cooling rates were determined. Based on the obtained experimental data a physically motivated model is formulated for the ferritic transformation with allowance for the effects of deformation and concurrent recovery of austenite. Under consideration is the deformation influence on both the nucleation and growth of the ferrite grains. The model is first to evaluate the variation of nucleation barriers owing to the hydrostatic component of internal stresses at austenite grain boundaries. The modeling results significantly dependent on this issue comply well with experimental data on the kinetics of ferritic-pearlitic transformation and final ferrite grain size in the considered steels.