Because of their extremely small grain sizes, nanograined (NG) materials exhibit very high strength. However truly NG materials (grain sizes below 100 nm) also have drawbacks: they are often produced in small quantities and exhibit limited tensile elongation to failure. Several methods have been suggested in terms of microstructural design to improve the limited ductility of NG materials. In recent years thermomechanical processes using strain-induced martensitic transformation and its reverse transformation (Martensite Treatment) were named as a method that produces NG metastable austenitic steels. This method is a combination of severe cold deformation and phase reversion annealing approach. NG and ultrafine grained (UFG) steels produced through this method have high tensile strength and excellent ductility. Nonetheless there is a significant interest to enhance the ductility in the NG/UFG materials produced by martensite treatment. It is the aim of this research to study the effect of accompanying martensite process by nanosize precipitates in order to produce a NG/UFG stainless steel with an improvement in its ductility. In this regard a Ti containing microalloyed 201L stainless steel was prepared in a laboratory vacuum induction furnace. The cast ingot was homogenized at 1200 °C for 12h, hot rolled to 8 mm thick and water quenched. The strip was then solution treated at 1200 °C for various times. After preparing the initial microstructure, specimens were cold rolled from 5 to 0.5 mm and subsequently annealed in the temperature range of 750-900 °C for 30-3600 s. X-ray diffraction and a Ferritescope instrument were used to determine the phase fraction of austenite and martensite after cold deformation and after annealing. The structural features were examined in optical microscope, scanning electron microscope (SEM), field emission SEM and atomic force microscope. Precipitation behavior was evaluated by electrical resistivity and microhardness tests. Distribution and chemical composition of the precipitates were examined using energy dispersive spectroscopy in the SEM. The saturation thickness reduction of martensite formation during the cold rolling at room temperature in Ti modified 201L stainless steel was about 30%. The results showed that the martensite transformation was suppressed with increasing strain rate due to adiabatic heating. The main findings were that through the martensite treatment a structure with a grain size of about 45±12 nm achieved after 90% cold rolling followed by reversion annealing at 900 °C for 60 s. This NG steel possessed a high yield strength (~1000 MPa), six times higher than that of initial coarse-grained steel, very high tensile strength (1330 Mpa), and exceptional elongation of 42% due to both precipitates and strain induced martensite that form during tensile test. The results show that the deformation mechanisms of NG/UFG austenitic stainless steels with high strength high ductility combination can be distinctly different from the CG counterpart, as documented via nanoindentation. The differences in the deformation mechanisms of NG/UFG and CG steels are distinctly reflected in the force–displacement plots and attributed to differences in austenitic stability associated with the grain size effect. These results are discussed and their possible effects on the final microstructure and mechanical properties are inferred. Key Words: Ti modified stainless steel, Thermomechanical traetment, Strain induced martensite, metastable austenite, Nano/Ultrafine grained, Reversion annealing, Cold rolling