Excellent formability is a key requirement for successful application of newly developed steel grades in a car body. This also includes the capability of the material to bear bending deformation, which is limited either by the localization of plastic deformation or by the initiation of cracks. The present work deals with Advanced- and Ultra High Strength Steels (AHSS, UHSS) with tensile strengths above 1000 MPa. It is investigated how the phenomena of strain localization and crack initiation are controlled by the microstructures of these materials. Air bending and die bending experiments were performed on steel grades with a variety of microstructures (ferrite-martensite, bainite, tempered martensite), including grades with retained austenite. Hereby the stages of damage evolution were analyzed in detail to find out, which influence the various microstructures have on strain localization and crack formation. In order to comprehensively characterize the formability of the materials, tensile and hole expansion tests were additionally performed. The results of the finite element simulations of the air bending test show that the distribution of strain during bending is determined by the strain hardening of the material. In addition, microscopic analyses of the bent samples were performed. It is shown that both the formation of strain localization in the form of shear bands and the formation of cracks are dependent on the properties and spatial distribution of the phases. This can be illustrated for a ferrite-martensite microstructure: The growth of shear bands is impeded by the hard martensite inclusions and, at the same time, the formation of voids in the vicinity of martensite islands promotes the initiation of cracks. In order to optimize bendability of AHSS and UHSS, a combination of high strain hardening and low hardness gradients is desirable. Within the scope of this work, this criterion was best fulfilled by the CP980HD grade, which consists of a homogeneous bainitic matrix with small islands of retained austenite. Consequently, the smallest critical bending radii for die bending and the largest bending angle for air bending were measured for this steel grade.