Phase transformations in cold-rolled (CR) 304L austenitic stainless steel were studied using different techniques, including dilatometry, X-ray diffraction and scanning electron microscopy. During continuous annealing, the dilatometric measurements indicated that the evolution of the deformed microstructures led to an important anomaly constituted of two contractions. Quantitative processing of the X-ray diffraction results allowed the determination of the temperature-dependence of α′-martensite and austenite (γ), phase fractions, dislocations density and lattice strains on heating to 900°C. It is demonstrated that the first contraction is due to the recovery of α′- and γ-phases. In this temperature range, it is suggested that the recovery in CR γ has caused the growth of surrounding α′ particles which competes with the reversion of the smallest α′ particles. The second contraction, on the other hand, has been attributed to the α′ reversion and recrystallization in CR γ regions.