Grain refinement of bulk materials by the SPD process followed by martensite transformation was investigated. Fe-28.5at.%Ni alloy sheets were severally deformed in austenite structure by the ARB process, and then cooled down to 77 K to cause martensite transformation. The ARB processed sheets deformed to 4.0 of total equivalent strain were filled with the ultra-fine lamellar boundary structure having about 200 run of average lamellar spacing. Martensite transformation starting temperature decreased with increasing the total equivalent strain. Martensite having characteristic morphologies appeared from the ultra-fine lamellar austenite in the sheet ARB processed by 5 cycles, although martensite transformed from conventionally recrystallized specimens with several tens micrometers of grain sizes showed typical plate (lenticular) morphology. It was concluded that the grain refinement by martensite transformation from ultrafine grained austenite is possible but low-angle boundaries in the austenite are not effective for refinement by martensite transformation.