Medium-Mn steels are characterized by ultrafine-grained (UFG) duplex microstructure consisting of ferrite and a large amount of retained austenite. Intercritical annealing is of great importance to achieving the UFG duplex microstructure and adjusting amount as well as stability of retained austenite. In the present work, the influence of intercritical annealing temperature on the microstructure and mechanical properties was investigated in a cold-rolled medium-Mn steel Fe-12Mn-3Al-0.05C. Particularly, the dependence of microstructural morphology on intercritical annealing temperature was emphasized to reveal the genesis of the microstructural morphology in medium-Mn steels. The ferrite-austenite duplex microstructure manifested an elongated morphology in the specimen annealed at 555 • C, which inherited the lath structure of the cold-rolled state. The medium-Mn steel exhibited a continuous yielding behavior and a relatively low strain-hardening rate. With an increase in intercritical annealing temperature up to 650 • C, the amount of retained austenite increased and microstructure was partially recrystallized, showing a mixture of elongated and equiaxed grain morphologies. When the intercritical annealing was applied at 700 • C, the medium-Mn steel mainly exhibited recrystallized microstructure with equiaxed morphology. The optimal balance between the amount and the stability of retained austenite led to an enhancement of strain hardening and ductility. With a further increase in the intercritical annealing temperature to 750 • C, the medium-Mn steel possessed pronounced strain-hardening behavior at the beginning of the tensile deformation with deteriorated ductility.