Thermomechanical processing simulations were performed using a hot-torsion machine, in order to develop a comprehensive understanding of the effect of severe deformation in the recrystallized and nonrecrystallized austenite regions on the microstructural evolution and mechanical properties of the 0.2 wt pct C-1.55 wt pct Mn-1.5 wt pct Si transformation-induced plasticity (TRIP) steel. The deformation schedule affected all constituents (polygonal ferrite, bainite in different morphologies, retained austenite, and martensite) of the multiphased TRIP steel microstructure. The complex relationships between the volume fraction of the retained austenite, the morphology and distribution of all phases present in the microstructure, and the mechanical properties of TRIP steel were revealed. The bainite morphology had a more pronounced effect on the mechanical behavior than the refinement of the microstructure. The improvement of the mechanical properties of TRIP steel was achieved by variation of the volume fraction of the retained austenite rather than the overall refinement of the microstructure.