This paper proposes a new methodology for online monitoring of microstructure evolution during hot rolling, focusing on work hardening and stress–strain state evaluation throughout the strip and plate rolling processes. The foundation of this approach is the real-time measurement of work hardening, enabling accurate calculation of flow stress considering temperature and strain rate variations. This provides a comprehensive understanding of material behavior during the rolling process. The methodology includes the development of an incremental plasticity model, allowing for precise reconstruction of stress–strain path histories, including retained strain at each rolling stage. The evaluation of work hardening and flow stress as functions of temperature and strain rate allows for the accurate identification of hardening and softening contributions at each rolling stage and the determination of retained strain. The proposed mathematical approach facilitates the implementation of intelligent real-time rolling control, enhancing the precision and efficiency of the process. The methodology holds promise for further research aimed at optimizing energy consumption in hot rolling, investigating strain rate sensitivity, and recrystallization phenomena, which could further refine the model and its applications. Thus, the presented methodology not only deepens the understanding and control of microstructural changes during hot rolling but also lays the foundation for future innovations in process optimization and materials science.