The microstructure and formability at the edge of picked steel sheet were investigated based on the phenomenon that earring and cracking were often appeared at these areas during punching of the steel sheet. There are coarse grains and mixed size grains in the edge microstructure. The strength of edge is lower lightly than that of middle of sheet and the formability becomes worse obviously. The plastic strain ratios of longitudinal and transverse orientations are 0.31 and 0.6 respectively with distinct anisotropy, being lower obviously than that of middle of steel sheet. The character of microstructure and mechanical properties at the edge of the steel sheet are caused by the lower rolling temperature of two phase regions of pro\|eutectoid Ferrite and Austenite. The difference of microstructure and mechanical properties at the edge of the steel sheet leads to the earring and cracking defects during punching. While the microstructure and properties at the edge of low carbon picked steel sheet can be improved by the optimization of rolling process and composition adjustment of the steel sheet.