The effect of tempering on the microstructure and mechanical properties of a medium carbon bainitic steel has been investigated through optical microscopy, electron back-scattered diffraction, transmission electron microscopy and X-ray diffraction analyses. A nano-level microstructure containing plate-like bainitic ferrite and film-like retained austenite is obtained by isothermal transformation at Ms+10°C followed by tempering within 240–450°C. Results show that the sample tempered at 340°C occupies the optimal balance of strength and toughness by maintaining a certain level of plasticity; samples tempered at 320°C and 360°C with low and high yield ratio come second. The microstructure of the steel is not sensitive to tempering temperatures before 360°C. When the temperature is increased to 450°C, the significantly coarsened bainitic ferrite plate and the occurrence of a small quantity of carbide precipitation account for its low toughness. The amount of retained austenite increases with the tempering temperature before 400°C, followed by decreasing with further increase in the temperature. This behavior is related to the competition between retained austenite further transforming into bainite and decomposing into carbide during tempering.