The aim of the present work is to describe the microstructural evolution of austenite in PH 15-5 during solution annealing and its influence on the evolving martensitic substructure. In recent research, questions such as the relationship between austenite grain size and martensitic substructure are not conclusively clarified. How-ever, the martensitic substructure such as packet-, block- and subblock-size and the distribution of martensitic variants affect the mechanical properties of a component and is therefore a crucial parameter in order to opti-mize strength and fracture toughness. Therefore, the formation of austenite and its transformation to marten-site during solution annealing is investigated by means of state-of-the-art in-situ observation techniques such as high temperature electron backscat-ter diffraction, high temperature x-ray diffraction, high temperature confo-cal laser scanning microscopy and dilatometry measurements. During solution annealing, phenomena such as the so-called “austenite memory effect” and “spontaneous recrystallization” are observed for the first time in PH 15-5. These phenomena affect the inner structure of aus-tenite concerning dislocation density, twin boundaries and grain size and are rarely investigated in-situ in literature up to now. However, in this the-sis the formation mechanism of the austenite memory effect in PH 15-5 is determined and its influence on spontaneous recrystallization and further-more on the developing martensitic substructure is investigated. Therefore, a novel approach concerning a quantitative martensite variant indexing for material states with a variation in austenite grain size was carried out, revealing a more homogenous variant distribution for larger austenite grains in combination with a smaller martensite block size. The observations indicate a direct correlation between martensite variant distribution and martensite block size. It is assumed that if the range of the elastic stress field, induced by the first forming martensite variants, exceeds austenite grain boundaries, strain compensation after martensitic transformation proceeds over grain boundaries and neighbouring austenite grains. Therefore, a smaller austenite grain size leads to an inhomogeneous martensite variant distribution and to a larger martensite block size.