A phenomenological mechanism of transformation plasticity is discussed, in the first part of the paper, why the transformation plastic deformation takes place under a stress level even lower than the characteristic yield stress of the material: This is principally based on the difference in thermal expansion coefficient of mother and new phases. Some calculated data of induced stress and strain depending on applied stress are represented. Bearing in mind that it is also a kind of plastic strain, a unified plastic flow theory is derived by introducing the effect of progressing new phase into the yield function of stress, temperature and plasticity related parameters. Thus obtained strain rate reveals to include the transformation plastic part in addition to thermo-mechanical plastic components. Application of the theory is carried out to simulate some complicated cases of varying stress and temperature, and the results are compared with experimental data.