A model describing the bainite reaction is presented that takes into account the effect of very small austenite grain size. This model considers the displacive approach and uses thermodynamic criteria for the description of the nucleation and growth of bainite sub-units forming either at grain boundaries or autocatalytically on previous sub-units. The evolution of the austenite composition with the partitioning and redistribution of carbon is estimated as the transformation proceeds. The size of the sub-units is calculated for each composition and temperature. The transformation kinetics, as well as the incomplete reaction phenomenon, are correctly predicted. Furthermore, the influence of the austenite grain size on the bainite transformation rate is addressed in the case of austenite grains smaller than the length of an unconstrained bainite sub-unit. In this case, the observed enhanced nucleation rate is semi-empirically related to the austenite yield strength. This semi-empirical relationship is corroborated with kinetics data from different alloys.