The microstructure evolution of the Fe-20Mn-2.6Al-2.6Si TRIP/TWIP steel with different deformation levels was studied with optical microscopy, X-ray diffraction and transmission electron microscopy. The results indicated that stacking faults and dislocation cells were primarily formed at the initial stage of deformation. The contents of the α martensite and ε martensite were gradually increasing with the strain increasing. At the last stage, the α martensite becomes the main phase. So, the tensile deformation mechanism of the Fe-20Mn-2.6Al-2.6Si steel was the phase transformation inducing the deformation (TRIP). The optical microscopy morphology showed that many lamellas appeared when the deformation level was up to 6.5%, and these lamellas were usually mistaken for deformation twins. But the transmission electron microscope (TEM) analysis indicated that deformation twins were hardly found at any of the deformation levels. Actually, the lamellas observed in the optical microscopy or low magnification TEM images were ε phase, which further confirms that the deformation mechanism of the Fe-20Mn-2.6Al-2.6Si TRIP/TWIP steel was the TRIP mechanism.