The strain-induced diffusionless shear transformation of retained austenite to martensite during straining of transformation induced plasticity (TRIP) assisted steels increases strain hardening and delays necking and fracture leading to exceptional ductility and strength, which are attractive for automotive applications. A novel technique that provides the retained austenite volume fraction variation with strain with improved precision is presented. Digital images of the gauge section of tensile specimens were first recorded up to selected plastic strains with a stereo digital image correlation (DIC) system. The austenite volume fraction was measured by synchrotron X-ray diffraction from small squares cut from the gage section. Strain fields in the squares were then computed by localizing the strain measurement to the corresponding region of a given square during DIC post-processing of the images recorded during tensile testing. Results obtained for a QP980 steel are used to study the influence of initial volume fraction of austenite and the austenite transformation with strain on tensile mechanical behavior.