The mechanical behaviour of nanocrystalline austenitic steels with and without yttria particles was investigated using in situ synchrotron diffraction during tensile deformation. Two different strain-hardening regimes were found. The first regime can be assigned predominantly to a martensitic phase transformation, the second to deformation twinning in the fragmented retained austenite. The kinetics of martensitic phase transformation is remarkably enhanced in the nanocrystalline structure. (C) 2012 Acta Materialia Inc. Published by Elsevier Ltd. All rights reserved.