The present work explores a design process of new medium-Mn alloy for forgings and its heat treatment optimization by thermodynamic simulations and experimental approach. The selection of specific chemical composition was performed on the basis of thermodynamic simulation for alloys with different additions of Mn and Al. The aim was to design an alloy allowing for production of at least 25% retained austenite in an intercritical annealing process, without deteriorating technological properties and economic indicators. Next simulations of intercritical annealing in a temperature range between 600 and 1000 °C, and their experimental verification were performed. For the thermodynamical simulations of different chemical compositions of steel and its intercritical annealing in a wide temperature range the JMatPro software was used. To verify the characteristic temperatures of steel such as Ac1, Ac3 and Ms, and for experimental investigation of intercritical annealing in a temperature range from 660 to 740 °C dilatometry was used. Obtained microstructures were characterized by means of X-ray diffraction and scanning electron microscopy. It was observed that with an initial increase in soaking temperature a fraction of retained austenite increases; however, its stability decreases, which leads to formation of large martensite fraction during cooling after soaking at high temperatures. The results of thermodynamic simulations and experimental tests showed the moderate agreement. Large differences were revealed for Ac1, Ms temperatures and the amount of retained austenite obtained at a given annealing temperature. The results clearly indicate that at the moment of software development and available databases for novel medium-Mn steels, simulations of their heat treatment can only be used to estimate results and be a guide for experimental research. However, they cannot be used to optimize heat treatment.