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A constitutive model for Transformation Induced Plasticity (TRIP) assisted steels is proposed that considers the elastic–plastic deformation of ferrite and austenite, the austenite–martensite phase transformation and the elastic deformation of martensite. Within this model, an explicit relation between martensite nucleation and plastic deformation within an austenite grain has been established based on the inverse Nishiyama–Wassermann (NW) relationship. In particular, strain-induced martensite nucleation and stress-assisted martensite growth have been included in one model with the help of a thermodynamic principle. With this model, we found consistently with experiment that the TRIP effect enhances the effective work hardening rate and hence is beneficial for improving strength and ductility of steels. The mechanical anisotropy produced by stress-assisted and strain-induced phase transformations are significantly different. Furthermore, we observed that austenite grains transform to martensite more quickly under tension than under compression.