The interaction between softening and precipitation mechanisms in hot worked Nb microalloyed austenite is analysed with the help of a physically based model. The model is able to calculate the evolution over time of the dislocation density (stress), stored energy and precipitate pinning force, the recrystallized fraction, the average precipitate diameter and precipitate number density, as well as the concentrations of the precipitating Nb over time. It is assumed that nucleation of precipitates occurs heterogeneously at dislocations with recovery producing a continuous decrease in dislocation density. This results in a reduction of the available nucleation sites for precipitation as well as a decrease in the driving force for recrystallization along time. By comparing the model predictions and the experimental results the values of several physical parameters involved in the model are discussed.