Update 6/21/2018: A new journal article has been released on the effect of grain size which is very interesting. I have added a brief summary of it at the bottom of this article.
In my posts on austenitizing I described parameters of heat treating to keep grain size as small as possible and therefore improve strength and toughness [1-3]. It is very difficult to improve both strength and toughness at the same time, usually increasing one decreases the other. By what mechanism does grain refinement improve both?