This study investigated the correlation between strain-induced precipitation (SIP) and static recrystallisation (SRX) in Ti microalloyed steel during stress relaxation after controlled compression. The final compression temperature strongly influenced the order of SIP and SRX and thus the evolution of the austenite structure. Precipitation-time-temperature (PTT) curve obtained for the experimental steel exhibited an inverted “S” shape. A recrystallisation kinetics model revealed that SRX, which occurs preferentially above 940 °C, resulted in delayed subsequent SIP, thus causing deviation in the PTT curve from the typical ‘C’ shape. Below 940 °C, the fastest nose temperature for precipitation was located at 900 °C, and the precipitate was constituted by TiC particles with a NaCl-type FCC structure. The dynamic competition between SIP and SRX processes were evaluated by comparing the relative magnitude of the recrystallisation driving force and precipitation pinning force during stress relaxation, combined with the evolution of precipitate and austenitic structure. The results indicated that the plateau period occurred because of the precipitation pinning effect inhibited recrystallisation-induced austenite softening. However, the non-uniform distribution of SIP restricted the mobility of the boundaries to a portion of the austenite grains, resulting in abnormal grain growth during the plateau period.