Three-dimensional finite element simulations are used to investigate the role of serrated flow on the strain at the onset of necking in a cylindrical uniaxial tension specimen. The material is idealized using a modified form of the McCormick constitutive equation, which has an additional material parameter that allows the rate of transient aging to be varied without affecting its steady-state response. Stability calculations and direct simulations show that, if the transient response is sufficiently slow, serrated flow can be suppressed, even though the material has negative steady-state strain rate sensitivity. This result is then used to determine the effect of suppressing serrated flow on the strain to localization. We find that negative steady-state sensitivity significantly reduces the strain required to initiate necking failure in a tensile specimen. However, the strain to failure is largely unaffected by the transient response of the material, and suppressing the serrated flow in particular has a negligible effect on the localization strain. We conclude that, while both serrated flow and reduced ductility are observed in materials with negative rate sensitivity, the reduction in ductility is not a direct consequence of serrated flow. (C) 2011 Acta Materialia Inc. Published by Elsevier Ltd. All rights reserved.