Stability of retained austenite is the key issue to understand transformation-induced plasticity (TRIP) effect. In this work, both thermal stability and mechanical stability are investigated by thermo-magnetic as well as in situ conventional X-ray diffraction and micro synchrotron radiation diffraction measurements. The thermal stability in a 0.20C-1.52Mn-0.25Si-0.96Al (wt%) TRIP steel is studied in the temperature range between 5 and 300 K under a constant magnetic field of 5 T. It is found that almost all austenite transforms thermally to martensite upon cooling to 5 K and M_S and M_f temperatures are analyzed to be 355 and 115 K. Transformation kinetics on the fraction versus temperature relation are well described by a model based on thermodynamics. From the in situ conventional X-ray and synchrotron diffraction measurements in a 0.17C-1.46Mn-0.26Si-1.81Al (wt%) steel, the volume fraction of retained austenite is found to decrease as the strain increases according to Ludwigson and Berger relation. The diffraction measurements also show that the mechanical stability depends on the orientation of the grain with respect to the direction of the applied stress, and the austenite grains at an angle of 45° or 60° were found to be more stable than those at lower or higher angles. Both thermal and diffraction experiments show an increase in the average carbon concentration of the remaining austenite with lowering temperature or increasing stress. Thermal and mechanical stability of retained austenite is therefore attributed to the carbon distribution over different austenite grains.