Nanostructured metals have high strength while they usually exhibit limited uniform elongation. While, a yield strength of approximately 2.1 GPa and a uniform elongation of about 26% were achieved in a severely deformed Fe-24.8% Ni-6.0% Al-0.38% C alloy in the present work. The plastic deformation mechanisms for the coarse-grained (CG) sample and the cold-rolled (CR) samples of this alloy were investigated by a series of mechanical tests and microstructure characterizations before and after tensile tests. No obvious phase transformation was observed during the tensile deformation for the CG sample, and the plastic deformation was found to be mainly accommodated by deformation twins and dislocation behaviors. While significant phase transformation occurs for the CR samples due to the facts that the deformed grains by CR are insufficient to sustain the tensile deformation themselves and the flow stress for the CR samples is high enough to activate the martensite transformation. The amount of phase transformation increases with increasing thickness reduction of CR, resulting in excellent tensile ductility in the severely deformed alloy. The back stress hardening was found to play a more important role in the CR samples than in the CG sample due to the dynamically reinforced heterogeneous microstructure by phase transformation.