The aim of the present study was to study the changes of micro-structural behavior of medium manganese steel during intercritical annealing. During the process, it was observed that the microstructure gradually evolved from austenite structure into martensite. The retained austenite volume fraction reached the maximum value of 35% at 650 o C annealing temperature. From SEM and TEM results, it was found that reversed austenite partly changed into fresh martensite during quenching while the remained part was retained as retained austenite. The final structure consisted of ferrite, retained austenite and fresh martensite.