The ductility and bendability of AA5754 automotive sheets have been investigated as a function of iron content. The influence of pre-strain, introduced by cold rolling, on the bendability has also been examined. The low iron containing alloy (0.08 wt.%) showed development of surface instability in the form of small undulations on the tensile surface. In contrast, the high iron containing alloy (0.30 wt.%) showed cracks on the tensile surface. The development of damage during bending has been studied by carrying out in-situ bend tests in a scanning electron microscope. High iron containing alloy exhibits damage at the iron rich particles which leads to drastic reduction in the bendability.