Lüders band formation in steels is critical to surface finish during automobile panel manufacturing. This research reports on the problem of Lüders band formation in interstitial free high strength steel compositions (IFHS-steels). The study investigates the effect of chemical composition and processing parameters on the formation of Lüders bands in IFHS-steels. It correlates the problem of Lüders band formation with precipitation kinetics behaviour during the industrial processing of IFHS-steels. Four different compositions viz. Ti-stabilized, Ti-Nb stabilized, low Ti-low Nb, and high Ti-low Nb with high Al were investigated. Annealing parameters were similar to industrial practice followed for batch and continuous annealing lines in steel manufacturing plants. Stabilized IFHS-steel compositions possessing excess of stabilizing elements (Ti, Nb, etc.) for stabilization of interstitial elements (C, N) also showed the problem of Lüders band formation. The new type of IFHS composition containing high Al, investigated in this research, showed no Lüders band formation during batch annealing cycles along with adequate mechanical properties (YS: 190–202 MPa; Δr-value: 0.25). Thus, steel compositions with high Al content processed through batch annealing cycle offer a practical solution to the problem of Lüders band formation in IFHS-steels.