A significant amount of austenite can be retained by rapid cooling following intercritical annealing and holding at the bainite transformation range in steel with comparatively low carbon and silicon contents. Retained austenite is blocky and very fine and moderately stabilized due to C enrichment. The elongation and the strength-ductility balance of the steel can be enhanced considerably due to strain-induced martensite transformation and transformation-induced plasticity (TRIP) of retained austenite.