The influence of different microstructures on the plastic stability of an air-hardened industrially produced medium-manganese steel is presented. For this matter, heat treatment parameters before and during intercritical annealing (IA) are varied, to achieve different microstructures. The resulting duplex microstructure is consecutively tested by tensile tests, which are monitored by digital image correlation (DIC) to obtain information on the local plastic deformation. The tests are accompanied by microstructure investigations using optical, scanning electron, and transmission electron microscopy. Finally, X-ray and electron backscatter diffraction experiments are performed before and after deformation, to describe the altering phase fractions. It is demonstrated that the effect of the deformation temperature prior to IA treatment has a significant influence on the duplex microstructure, as it changes the austenite morphology from lamellar to globular and increases the phase fraction. The change in austenite phase fraction and morphology results in a higher yield strength (approximate to 100 MPa), as well as higher uniform and total elongations (+2% and +5%, respectively). The DIC and tensile tests reveal that these differences in the austenite phase lead to a complete change in the strain hardening behavior, from continuous flow to discontinuous serrated flow, with clearly visible deformation bands during plastic deformation. Air-hardening forging steels are a new steel concept, promising high strength and ductility combinations in combination with a reduced environmental impact. Herein, the effect of the microstructure before intercritical annealing is discussed in regard to microstructure evolution and strain hardening behavior. It is demonstrated that the microstructure prior to intercritical annealing governs the microstructures and final mechanical properties.image (c) 2024 WILEY-VCH GmbH