A metastable austenitic stainless steel was repetitively cold-rolled and reversely annealed. The effect of the final annealing temperature on microstructure, tensile properties and tensile deformation mechanism was investigated by electron backscattering diffraction, X-ray diffraction, and transmission electron microscopy. The results revealed that austenite grains were significantly refined and the strength was greatly enhanced by the repetitive cold-rolling and reverse annealing treatment. The reversed austenite grains gradually grew as the final annealing temperature increased from 800 °C to 950 °C, whereas rapid growth of austenite grains has been observed in 1000 °C-annealed samples, which can be ascribed to the gradual dissolution of M23C6 carbide particles with increasing annealing temperature and almost complete dissolution at the annealing temperature of 1000 °C. The yield strength and ultimate tensile strength showed an inverse relationship with annealing temperature due to grain growth, whereas the elongation exhibited a direct relationship due to the austenite stability caused by carbides dissolution. The microstructural examination of the annealed samples, with different tensile strains, indicated that the formation of strain-induced α′-martensite has been retarded, whereas the formation of deformation twins has been promoted by increasing the final annealing temperature. The tensile deformation mechanisms were dependent on the annealing temperature, including a transformation from strain-induced α′-martensite to a hybrid of strain-induced α′-martensite transformation and deformation twinning, and to deformation twinning as the annealing temperature increased from 800 °C to 1000 °C.