The phase transformation in two modes, including both displacive and massive growth of τ-phase from ε-MnAl(C), was observed by in situ transmission electron microscopy. The exact temperature range for different phase transformation modes was determined by magnetic measurements. The displacive growth of ε→τ in Mn₅₄Al₄₆ (or Mn₅₄Al₄₆C_2.44) occurs at temperatures below 650 K (or 766 K), above which both modes coexist. One-third or less of the ε-phase can be transformed into τ-phase via displacive mode while the remaining two-thirds or more via massive mode. In bulk τ-phase, most τ-nanocrystals formed via displacive mode are distributed in the matrix of large τ-grains that formed via massive mode. The typical massive growth rate of the τ-phase is 8–60 nm/s, while the displacive growth rate is low. A more complete understanding of the ε→τ phase transformations in the MnAl-based magnets was provided in this work, based on which the annealing process for ε→τ was optimized and thus high purity τ-phase with high saturation magnetization was obtained.