The global drive toward decarbonization has spurred industry interest in the compact steel production (CSP) process for manufacturing automotive steel sheets. Understanding the hot deformation behavior, particularly the metadynamic softening mechanism occurring between passes, is essential for evaluating process feasibility under CSP process. This study investigates the metadynamic softening behavior of CP800 steel intended for CSP applications, utilizing isothermal double compression tests performed at the deformation temperatures of 1173, 1273, and 1373 K, strain rates of 0.1,1, and 5.0 s−1, and the interpass times of 1, 10, and 20 s. The softening behavior was assessed through the deformation flow stress–strain curves under varying conditions, and a kinetic equation of metadynamic recrystallization was proposed and validated against experimental data. Additionally, the effect of initial austenite grain sizes of 42 μm and 92 μm on metadynamic recrystallization were analyzed. Results indicate that the final rolling pass temperature should exceed 1173 K to prevent mixed grain structures. Although grain refinement induced by the metadynamic recrystallization in CP800 steel was found to be independent of initial grain size, the final grain size itself remained sensitive to the initial grain dimensions. Adopting lower holding temperature and shorter holding durations prior to rolling is advisable for energy-efficient CSP, provided compositional homogeneity and suitable deformation temperatures are maintained. These insights contribute valuable guidance for optimization CSP process in the production of CP800 steel.