The stress and strain partitioning between the different micro-structural constituents, and the initiation of the martensitic transformation during the yielding of multi-phase transformation-induced plasticity steel were studied by in-situ synchrotron X-ray diffraction experiments under tensile tests. Position, intensity and width of retained austenite and ferrite diffraction peaks were used to determine lattice strain and phase fractions. At low tensile stress, small elastic lattice deformations were observed. Whereas the Poisson strains in the ferrite were found to be reduced at the macroscopic yield stress, the strain in the austenite increased. The results clearly show that at the elasto–plastic transition the transformation of some of the retained austenite is stress induced.