Light-weight high-manganese steels with high aluminum and carbon contents are known to possess high age-hardening potential due to the precipitation of nano-sized κ-carbides. Although in recrystallized material the precipitation of the κ-phase has been widely researched, the influence of pre-deformation/deformation microstructure on the formation of κ-carbides is still unknown. The present study aims at gaining an increased understanding of the underlying mechanisms (and their interplay) active during annealing after pre-deformation, i.e. concurrent strengthening by precipitation of κ-carbides and softening by recovery/recrystallization. Therefore, a Fe-29.8Mn-7.65Al-1.11C steel was age-hardened in deformed/cold-rolled as well as in recrystallized condition. The microstructure and tensile behavior of the material in both states after annealing treatments at 600–800 °C were investigated by means of light optical microscopy, (high-resolution) scanning transmission electron microscopy, x-ray diffraction and hardness measurements as well as tensile tests. The focus was put on understanding the interplay between microstructural defects (e.g. dislocations), precipitation of κ-carbides, and recovery/recrystallization. The fundamental dependence of strengthening and softening mechanisms on the precondition, annealing parameters and correlation with the mechanical properties are discussed.