In this work, the transformation and dissolution/precipitation behaviour of the soft martensitic, precipitation-hardening steel X5CrNiCuNb16-4 (often referred to as 17–4 PH or AISI 630) has been investigated by various analytical in situ techniques. First, austenite formation during the heating stage of a solution treatment (or austenitization) is examined. Subsequently, a major part of this work evaluates precipitation during cooling from the solution treatment (i.e., the quench-induced precipitation of Cu-rich particles). The following analytical in situ techniques were utilised: synchrotron high-energy X-ray diffraction, synchrotron small-angle X-ray scattering, differential scanning calorimetry, and dilatometry. These were complemented by ex situ high-angle annular dark-field scanning transmission electron microscopy coupled with energy-dispersive X-ray spectroscopy on as-quenched samples after various cooling rates. The continuous heating transformation and continuous cooling transformation diagrams have been updated. Contrary to previous reports, X5CrNiCuNb16-4 is rather quench sensitive and the final properties after ageing degrade if cooling is done slower than a certain critical cooling rate. Quench-induced Cu-rich precipitation happens in two reactions: a larger, nearly pure Cu face-centred cubic phase forms at higher temperatures, while at medium temperatures, spherical Cu-rich nanoparticles form, which are found to be body-centred cubic at room temperature. The dimensions of the quench-induced particles range from several µm after cooling at 0.0001 K s-1 down to just a few nm after cooling at 1 K s-1. The maximum age hardening potential of X5CrNiCuNb16-4 can be exploited if a fully supersaturated solid solution is reached at cooling rates above the critical cooling rate of about 10 K s-1.