This study investigated the austenite stability and deformation behavior of cyclic quenching-austenite reverse transformation processed Fe-0.25C-3.98Mn-1.22Al-0.20Si-0.19Mo-0.03Nb medium Mn steel. A number of findings were obtained. Most importantly, the extent of the TRIP effect was mainly determined by an appropriately retained austenite stability rather than its content. Simultaneously, chemical elements were the key factors affecting austenite stability, of which Mn had the greatest impact, while the difference of retained austenite grain size and Mn content resulted in different degrees of retained austenite stability. Additionally, there were still large amounts of strip and granular-retained austenite shown in the microstructure of the CQ3-ART sample after tensile fracture, revealing that the excessively stable, retained austenite inhibited the generation of an extensive TRIP effect.