Ductile fracture mechanism in fine-grained high-strength dual phase steel in sheet form, which incorporated martensite particles in a soft ferrite matrix, was studied through extensive quantitative metallography, scanning electron microscopy (SEM), and electron backscattered diffraction (EBSD) observations of polished sections as well as fracture surfaces analysis of failed specimens. The void characteristics in terms of area fraction, density, and average size were examined as a function of thickness strain in the sectioned specimens. Detailed microstructural analysis revealed that interface decohesion at triple junctions of ferrite–ferrite–martensite was the dominant void nucleation mechanism. EBSD analysis also revealed that void nucleation was predominantly promoted by the increase of ferrite–ferrite grain boundary misorientation with strain, especially at the boundaries incorporating adjacent martensite particles. Moreover, the study of voids nucleation and evolution behavior suggested that ductile fracture in this steel was nucleation controlled such that just before the final fracture incidence, a high density of voids would be nucleated or a sudden accelerated void nucleation could happen. Microscopic observations as well as statistical analysis confirmed this phenomenon.