1.4%C ultra high carbon steel (UHCS) was prepared in order to study the substructure of martensite transformation. Because of ultra-fine spherical carbide, the growth of austenite grain, whose average size was 2.5μm, was prohibited. After quenching, there was a great deal of lath martensite. The sub-structure was composed of a large quantity of dislocations and twins. Through calculation, it was determined that twin shear stress increases faster than that of slip due to the reduction of austenite grain sizes. A model based on twin and slip shear stresses has been proposed, which yields critical grain size ranges from 1-4μm. The result is in agreement with measured results.