The microstructural change of supersaturated austenitic Fe-30.0wt%Mn-7.8wt%Al-1.3wt%C alloy on ageing at 823 K has been investigated by transmission electron microscopy (TEM) and X-ray diffraction. Efforts to correlate the modulation wavelength behavior with mechanical proper ties in the process of spinodal decomposition leading to the cubic kappa'-carbide (Fe,Mn)(3)AlCx formation have been made. In parallel with the modulation wavelength coarsening behavior, both the microhardness and the tensile strength increase in two stages during ageing. The first stage strengthening coincides wi th the slow growth spinodal decomposition, while the second occurs at the Lifshitz-Slyozov-Wagner (LSW) growth stage of ordered kappa' particles. By the optimal ageing treatment of the alloy, a high yield strength up to 1080 MPa with an excellent 31.5% elongation can be attained. After further ageing, the alloy softened rapidly, and its elongation deteriorated drastically due to the formation of the grain boundary lamellar colonies composed of discontinuously coarsened kappa carbide and transformed alpha ferrite phases. (C) 1997 Acta Metallurgica Inc.