A material model is proposed which captures microstructural changes in materials with phase transformations. The micromechanical concept of a representative cell is used to derive evolution equations for microstructural variables and relations for the overall material behaviour. The microstructural variables are directly related to the geometry of the microstructure. Assuming an elliptical inclusion with eigenstrains and an interface energy the attempt is made to model the micromechanics rather accurately. Results are shown for material parameters that mimic nickel base alloys at high temperatures. Macroscopic creep occurring due to formation and movement of dislocations is not considered.