The cold-forging quality alloy steel wire is generally fabricated by drawing, followed by intercritical annealing treatment to achieve the necessary formability for cold forming. The quality of a spheroidized annealing wire affects the forming quality of fasteners. The Taguchi method along with the analysis of variance (ANOVA) is used to obtain optimal intercritical annealing parameters to improve the performance of cold-drawn SCM435 alloy steel wires. The spheroidized annealing qualities of alloy steel wires are affected by various factors, such as preheating rate, spheroidized annealing temperature, prolonged heating time, holding temperature and time, low cooling rate, and temperature. The spheroidized annealing conditions affect the quality characteristics of alloy steel wires, such as tensile strength, hardness, and ductility. A series of experimental tests on cold-drawn SCM435 alloy steel wires is carried out in a commercial bell furnace with protective hydrogen atmosphere. The temperatures are precisely controlled within ±2 °C and a closed-loop atmosphere control system is applied to determine the optimal atmosphere flow settings by using a zirconium oxide sensor in conjunction with annealing process equilibrium. It is experimentally revealed that the spheroidized annealing temperature, prolonged heating time, and holding temperature significantly affect the quality of annealed cold-drawn SCM435 alloy steel wires. The optimal combination of intercritical process parameters leads to obtaining the optimal mean tensile strength of 527.1 MPa, the optimal mean hardness of 76.2 HRB, and the optimal mean ductility of 0.437 with a shorter processing time. The variations of the properties are significantly reduced to achieve a much even quality for annealed wires. The new spheroidizing parameter settings evidently improve the performance measures over their values at the original settings. The performance of cold-drawn SCM435 alloy steel wires is substantially improved.