Microstructure determines properties. The evolution is phase-driven:
Annealed State: Slow cooling from the austenite region results in a coarse ferrite-pearlite microstructure. Pearlite is a lamellar mixture of ferrite and cementite (iron carbide). This structure is soft and ductile but weak.
Normalized State: Faster air cooling refines the grains. The microstructure is a finer pearlite with some ferrite, offering a modest improvement in strength and toughness over the annealed state.
Quenched State (As-Quenched): Rapid cooling (oil quench) from austenite suppresses diffusion-based transformations, resulting in martensite. This is an extremely hard, strong, but brittle supersaturated solid solution of carbon in iron with a needle-like structure.
Quenched & Tempered State (+QT): Tempering the martensite relieves internal stresses and allows fine carbides to precipitate. The final microstructure is tempered martensite (or upper bainite if cooling was slightly slower). This consists of a fine, tough ferrite matrix with a uniform dispersion of very small, stable carbide particles (like Mo2C, Cr7C3). This structure delivers the optimal balance of high strength (from the matrix and carbides) and good toughness/ductility (from the stress-relieved ferrite).