The effect of heat treatment on the structure and mechanical properties of a metastable austenitic steel subjected initially to cold radial forging is studied. The evolution of the phase composition, of the structure and of the texture is investigated. The strength, the ductility and the impact toughness are determined as a function of the annealing temperature. It is shown that the cold radial forging yields a gradient distribution of strain martensite over cross section. Subsequent annealing at 500°C causes precipitation hardening of the strain martensite due to precipitation of nanocarbides. In addition to the considerable hardening (σ r > 1500 MPa) this is accompanied by formation of a high-toughness state ( KCT > 1.4 MJ/m 2 ). Medium-temperature (650°C) annealing produces a structure represented by clusters of fine grains of austenite and martensite with orientations A ∥ PA and M ∥ PA parallel to the bar axis (PA) and coarse austenite grains with orientation A ∥ PA. This provides a combination of high strength (σ r > 1100 MPa), ductility (δ > 20%) and impact toughness ( KCT ~ 1.3 MJ/m 2 ).