Microstructure evolution and mechanical properties were investigated in transformation-induced plasticity (TRIP) steel having a different initial microstructure. Compared with the cold-rolled structure that evolves into a typical microstructure of TRIP steel, the martensitic initial structure produces a more lath-type microstructure as the fraction of retained austenite increases in the initial microstructure. The interlath austenite after heat treatment contributes to improving the tensile properties by the enhanced stability and the refinement of the matrix phase.