This work discusses the development of the microstructure and mechanical properties of medium-carbon steel that contains silicon, aluminium and microadditions of Nb and Ti. Two cooling strategies were designed based on the thermodynamic equilibrium calculations and continuous cooling transformation diagram, which was determined for plastically deformed austenite. The cooling paths enabled the production of ferrite based and bainite based steels. The specimens were obtained via the thermomechanical rolling process with isothermal holding of steel at 450°C. Microstructure investigations were performed using light, scanning and transmission microscopy methods. The distribution and amount of retained austenite were determined using the electron backscatter diffraction technique, whereas transmission electron microscopy allowed the identification of the morphology of the γ phase. The amount of austenite and its carbon content were assessed using X-ray diffraction. Relations between microstructure and mechanical properties were formulated based on the mechanical stability of the retained austenite.