Two Mo-Nb microalloyed transformation-induced-plasticity (TRIP) steels, with Al contents of 0.23 and 0.65, were subjected to several hot-rolling conditions designed to generate different ferrite morphologies and grain sizes. These structures were then cold rolled and TRIP annealed under different heat-treatment conditions. To further develop TRIP steel in terms of strength and ductility, stabilizing retained austenite by isothermal bainitic transformation was studied in detail. Microstructure observation and tensile tests were conducted, and volume fractions of retained austenite were measured. It was observed that increasing the aluminum content enhances the transformation rate and increases the total amount of bainite fraction at the expense of retained austenite. The latter effect enhances formability by increasing ductility. Furthermore, it was observed that the hot-rolling schedule, prior to cold rolling and heat treatment, has a decisive effect on structure refinement, which enhances the strength-ductility balance of the final product. To study the transformation behavior, dilatometer testing was conducted under conditions similar to that of the heat treatment. Thermodynamic calculations were used to verify the results.