Austenite is also known as Γ Iron, is a form of Iron with a Face Centered Cubic structure, with any Carbon atoms inserted in the gaps between the Iron atoms. Any other alloying elements, such a Chromium or Vanadium will usually be stuck in the matrix replacing the usual spot of a Iron atom.

When Carbon is stuck into the Austenite, it pushes some molecules out of the way, which helps to strengthen the metal, since a distorted matrix is less likely to slip. This is true for all phases of Iron, which is why we alloy Iron with Carbon to make Steel.

Austenite is only stable above 727 C, and as a result, we don't really run into it that often other than when we're refining Steel.

In solid state it comes either pure, mixed with ferrite, or mixed with Cementite. It only comes mixed with Ferrite if there's less than 0.76% Carbon, and is only pure at fairly high temperatures. Also, any more than 6.3% Carbon in the mix, and you can't get Austenite at all, all you get is Cementite. Of course, that's too much carbon for most applications anyways.

So what do we do with Austenite to get it into something that's useful? We quench it.

If you can cool it down really fast, about a 500 degree drop in temperature in a second, you can form Martensite. Martensite is quite hard, and brittle. However, it can be tempered to make it less brittle while retaining the hardness.

If you only cool it down to between 200C and 550C, and wait about 1000 seconds, it'll turn into Bainite. The higher the temperature, the quicker it'll transform, so if you want it to transform at a lower temperature, again you'll have to cool it down fairly quickly.

Bainitic steels are still nice and strong and hard, but are also much more ductile than Martensite, which is a good thing.

And, if you cool it slower, it'll turn into Pearlite. At 550C is the temperature at which it'll transform the fastest. Any hotter than that and it'll take longer, taking hours if you do it just below 727C.

Pearlite is not as strong or hard as Bainite, but it's even more ductile, which can be useful. As expected, the Pearlite produced at the lower temperatures, called Fine Pearlite, is harder than that produced at the higher temperatures, called Coarse Pearlite.

"But what if I want to mix and match properties Mr. Palpz?", you might ask. Well, if that's the case, you can! You see, if you take something undergoing a transformation and cool it down before it's done, the remaining Austenite (Remember that stuff? It's what this node's about) will turn into whatever it would normally at the new temperature.

So you can take some nice hot Austenite, cool it down enough to make Pearlite, wait till it's halfway transformed, and then stick it in a bucket of water, and the rest will turn into Martensite. Cool, huh?

So, to recap, Austenite is cool because we can make various hard stuff out of it. Sources:
William D. Callister, Jr., Materials Science and Engineering An Introduction, 5th Edition. John Wiley & Sons, Inc.

My memory from ENME421, Mechanical Engineering, Materials I, at the University of Calgary.

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