Residual stresses affect the performance and reliability of most manufactured goods and are prevalent in casting, welding, and additive manufacturing (AM, 3D printing). Residual stresses are associated with plastic strain gradients accrued due to transient thermal stress. Complex thermal conditions in AM produce similarly complex residual stress patterns. However, measuring real-time effects of processing on stress evolution is not possible with conventional techniques. Here we use operando neutron diffraction to characterize transient phase transformations and lattice strain evolution during AM of a low-temperature transformation steel. Combining diffraction, infrared and simulation data reveals that elastic and plastic strain distributions are controlled by motion of the face-centered cubic and body-centered cubic phase boundary. Our results provide a new pathway to design residual stress states and property distributions within additively manufactured components. These findings will enable control of residual stress distributions for advantages such as improved fatigue life or resistance to stress-corrosion cracking.