A modified high Cr ferritic heat-resistant steel was developed and subjected to the thermomechanical treatment. The effect of applied stress and temperature on martensitic transformation and microstructure was studied by using high-resolution differential dilatometer and optical microscope. Applied stress raises the amount of defection as dislocation and grain boundary defects, thus elevate Ms. Applied stress also lead to the increase of transformation time due to the mechanical stabilization of austenite. Increase of applied stress or temperature would enhance these above effects.