Carbide-free bainitic (CFB) steels belong to the family of advanced high strength steels (AHSS) that are struggling to become part of the third-generation steels to be marketed for the automotive industry. The combined effects of the bainitic matrix and the retained austenite confers a significant strength with a remarkable ductility to these steels. However, CFB steels usually show much more complex microstructures that also contain MA (Martensite-Austenite) phase and auto-tempered martensite (ATM). These phases may compromise the ductility of CFB steels. The present work analyzes the substructure evolution during tensile tests in the necking zone, and deepens into the void and crack formation mechanisms and their relationship with the local microstructure. The combination of FEG-SEM imaging, EBSD, and X-ray diffraction has been necessary to characterize the substructure development and damage initiation. The bainite matrix has shown great ductility through the generation of high angle grain boundaries and/or large orientation gradients around voids, which are usually found close to the bainite and MA/auto-tempered martensite interfaces or fragmenting the MA phase. Special attention has been paid to the stability of the retained austenite (RA) during the test, which may eventually be transformed into martensite (Transformation Induced Plasticity, or TRIP effect).