Transformation-induced plasticity (TRIP) behavior was studied in steel with the composition Fe-0.07C-2.85Si-15.3Mn-2.4Al-0.017N that exhibited two TRIP mechanisms. The initial microstructure consisted of both ε- and α-martensites with 27 pct retained austenite. TRIP behavior in the first 5 pct strain was predominately austenite transforming to ε-martensite (Stage I), but upon saturation of Stage I, the ε-martensite transformed to α-martensite (Stage II). Alloy segregation also affected the TRIP behavior with alloy-rich regions producing TRIP just prior to necking. This behavior was explained by first-principles calculations which revealed that aluminum significantly affected the stacking fault energy in Fe-Mn-Al-C steels by decreasing the unstable stacking fault energy and promoting easy nucleation of ε-martensite. The addition of aluminum also raised the intrinsic stacking fault energy and caused the ε-martensite to be unstable and transform to α-martensite under further deformation. The two-stage TRIP behavior produced a high strain hardening exponent of 1.4 and led to an ultimate tensile strength of 1165 MPa and elongation to failure of 35 pct. © 2013 The Minerals, Metals & Materials Society and ASM International.