In the present study, in situ high-energy X-ray diffraction (HEXRD), dilatometry, and metallography were conducted for the purpose of understanding microstructure evolution during intercritical annealing of a Fe-0.19C-4.39Mn steel from a martensitic initial condition. Three different simulations for austenite growth and solute partitioning during isothermal holding were conducted using the DICTRA™ module of Thermo-Calc®. The microstructures after intercritical annealing exhibit film-like retained austenite; however, in situ HEXRD indicates that retained austenite in the initial martensitic microstructure had decomposed upon heating to the isothermal holding temperature, suggesting that film-like austenite may be generated during intercritical annealing via nucleation and growth of new austenite and without necessarily preserving initial retained austenite films in the martensitic microstructure. Metallography and in situ HEXRD also indicate that cementite had formed upon heating but did not readily dissolve during an 1800 s isothermal hold although considerable growth of austenite had occurred during the isothermal hold, suggesting that austenite nucleation and initial growth during intercritical annealing does not solely occur due to carbon partitioning. A simulation incorporating cementite suggests that the increase in austenite fraction during intercritical annealing initially occurs in association with Mn partitioning followed by austenite growth induced by gradual cementite dissolution.