This work reports the refinement of pearlite structure into nanostructure using electropulsing. Nanostructured pearlitic steel wires possess nanoscale lamellae or nanoscale grain microstructures. Fabrication of nanostructures by severe plastic deformation and lamellar to grain transformation have been investigated. It is suggested that an aligned pearlite structure is preferred in severe plastic deformation. The lamellar to grain transformation is controlled by diffusion of carbon within cementite and also from cementite to ferrite phases. Carbon mobility is changed by mechanical, thermal and electrical states. The interface between nanoscale sub-grains in the ferrite phase has considerable carbon content. Numerical calculations and experimental observations demonstrated these mechanisms.