The {001}<210> texture, which is preferable for good magnetic properties in non-oriented electrical steel, is enhanced by the two-stage cold rolling method in which the intermediate annealing temperature is 640°C. The mechanism of {001}<210> texture development by two-stage cold rolling method was investigated by the measurement of microtexture changes during annealing with EBSP (Electron Back Scattering Pattern). The intermediately annealed sheet, whose recrystallized fraction is 60 %, mainly consists of <111>//ND small equiaxed recrystallized grains and <110>//RD elongated deformed grains. During final annealing, the growth of <111>//ND recrystallized grains is suppressed and {001}<210> grains grow consuming <111>//ND recrystallized grains. This could be caused by the strain introduced by second cold rolling in <111>//ND recrystallized grains. Consequently, {001}<210> grains dominate the overall texture of the final annealed sheet.