The influence of microstructure on the fracture toughness of two industrially processed 1000 MPa dual-phase (DP) steel grades is investigated. Crack initiation and propagation resistance are evaluated by means of the essential work of fracture (EWF) methodology and the main damage and fracture mechanisms are investigated. The results are discussed in terms of the proportion and distribution of the different microstructural constituents, which is assessed by scanning electron microscopy (SEM), high-resolution electron backscatter diffraction (HR-EBSD) and nanoindentation hardness measurements. The investigations show that the strain-induced transformation of retained austenite to martensite (TRIP effect), may be detrimental to cracking resistance, even though it increases tensile properties. This phenomenon is attributed to a “brittle” network effect generated by the presence of hard fresh martensite islands in the fracture process zone. The connectivity of the hard secondary phases and the proportion of soft phase (ferrite) also have a major role in fracture toughness. The DP steel with the larger volume fraction of ferrite and homogeneously distributed martensite islands shows significantly higher crack propagation resistance. The contribution of necking to the ductile fracture process is evaluated by means of thickness measurements in fractured DENT specimens and the correlation between the specific essential work of fracture (we) and tensile properties is investigated. It is concluded that the global formability and cracking resistance of high strength DP steels can be balanced through microstructural tailoring. © 2020 The Author(s)