Demand is growing for advanced high strength steels (AHSS) in the automotive industry driven by a desire for lightweighting solutions to meet increasingly stringent fuel economy standards. Formability is a critical factor for producing reduced gauge steel parts with the complex geometries required to maintain stiffness. Global formability represents the ability of a sheet material to be deformed under various stress conditions and to be formed into a part without failure. It can be estimated using forming-limit diagrams or ductility measurements from conventional uniaxial tensile tests. However, these tests cannot reliably assess the local formability at the edges or at the internal holes of the blanks during stamping. Numerous correlations have been previously developed to predict local formability such as yield strength to tensile ratio, true strain at fracture, and post uniform elongation but they are often inaccurate – particularly for AHSS grades. In this presentation, the local formability of a new class of 3rd Generation AHSS developed by NanoSteel will be demonstrated utilizing hole expansion ratio (HER) testing. Analysis of the resulting HER values indicated the important role of new factors in local formability related to the underlying deformation mechanisms and structural transformation. Existing and new mechanisms governing material response during HER testing will be discussed in detail, including methods to improve local formability in sheet steel based on the new findings.