A 10 wt.% nickel-steel has been developed for high pressures and low-temperature applications, due to its high strength, excellent toughness, and low ductile-to-brittle transition temperature (DBTT). Under dynamic loading conditions this steel is, however, prone to shear localization that manifests as adiabatic shear bands (ASBs). The temperature increases and thermoplastic microstructural evolution in the ASB are studied in detail, from the macroscopic length scale to the atomic-scale employing correlative electron-backscatter diffraction (EBSD), transmission electron microscopy (TEM), and atom-probe tomography (APT). From a calculation of the temperature increase under adiabatic conditions, based on the conversion of plastic-work to heat generation, the microstructural transitions in the ASB are discussed specifically for: (i) a b.c.c.-f.c.c. phase-transformation and their elemental partitioning; (ii) the thermodynamic model for the compositional change of the V(Nb)-rich carbonitride precipitates during a temperature increase; and (iii) grain-refinement and rotation by dynamic/mechanical recrystallization processes. Solute segregation at subgrain boundaries, measured using the Gibbsian interfacial excess methodology, reveals how solute segregation contributes to the instability of localized shear-deformation by promoting the depinning of solute elements and the migration of a grain boundary. Finally, a kinetic model for grain refinement/rotation within an ASB is described by the dynamic recrystallization behavior with: (i) subgrain formation; (ii) rotation/refinement by P a g e | 48 2 deformation; and (iii) grain growth by subgrain coalescence with further rotation and a temperature increase. The temperature increase under dynamic deformation in an ASB promotes grain boundary migration and subgrain coalescence to create a large degree of equiaxed grains with a low density of imperfections.