This study focuses on the fracture mode of 201 austenitic steel at room temperature (RT) and at − 40°C for one hour and three hours. The results reveal that at room temperature, the fracture is dominated by ductile behavior. At − 40°C, the fracture mode is a mix of ductile and brittle behavior. Type 201 austenitic stainless steel has a low stacking fault energy value (about 16 mJ.m − 2 at RT), leading to the activation of the transformation-induced plasticity (TRIP) effect. When the sample is soaked at − 40°C for three hours, deformation-induced martensite transition (DIMT) formation with the volume fraction rises significantly to 19.9%. At − 40°C for 3 hours, the alloy's impact energy absorption is reduced by 39%. The interaction of deformed austenite grains with previous austenite grain boundaries results in the formation of serrated grain boundaries in samples soaked at − 40°C. Serrated grain boundaries prevent crack propagation and reduce crack expansion at the grain boundary during the fracture of this alloy. The width of the crack at serrated grain boundaries is 38% less than that of the straight grain boundary.