The effect of retained austenite stability on microstructure evolution and mechanical properties of a new cold-rolled medium-manganese steel (0.12C, 7.69Mn, 1.45Si, 2.76Al wt-%) under intercritical annealing Q&P process at different partitioning temperatures was investigated. The evolution of retained austenite was characterized and statistically analysed using SEM, TEM, EBSD, and XRD techniques. The results show that the stability of retained austenite depends to a large extent on the applied heat treatment and is mainly attributed to the retained austenite content and morphology, whose carbon content is not the main influence. More retained austenite content and the formation of heterogeneous austenite structures (granular, massive, lamellar) are observed at a partitioning temperature of 150°C. The retained austenite of different morphologies has different stabilities and can sustain the TRIP effect at different strain stages, obtaining the best comprehensive mechanical properties with 34.5% elongation and the product of tensile strength and elongation is up to 43.5 GPa·%.