This paper presents a comprehensive study on the strain-induced martensitic transformation and reversion transformation of the strain-induced martensite in AISI 304 stainless steel using a number of complementary techniques such as dilatometry, calorimetry, magnetometry, and in-situ X-ray diffraction, coupled with high-resolution microstructural transmission Kikuchi diffraction analysis. Tensile deformation was applied at temperatures between room temperature and 213 K (−60 °C) in order to obtain a different volume fraction of strain-induced martensite (up to ~70 pct). The volume fraction of the strain-induced martensite, measured by the magnetometric method, was correlated with the total elongation, hardness, and linear thermal expansion coefficient. The thermal expansion coefficient, as well as the hardness of the strain-induced martensitic phase was evaluated. The in-situ thermal treatment experiments showed unusual changes in the kinetics of the reverse transformation (α′ → γ). The X-ray diffraction analysis revealed that the reverse transformation may be stress assisted—strains inherited from the martensitic transformation may increase its kinetics at the lower annealing temperature range. More importantly, the transmission Kikuchi diffraction measurements showed that the reverse transformation of the strain-induced martensite proceeds through a displacive, diffusionless mechanism, maintaining the Kurdjumov–Sachs crystallographic relationship between the martensite and the reverted austenite. This finding is in contradiction to the results reported by other researchers for a similar alloy composition.