The aim of the present work is to determine the austenite to ferrite transformation temperatures in a Si-Al non-oriented electrical steel. Critical transformation temperatures on heating and cooling are determined using an in-situ X-ray diffraction technique where the specimen is heated or cooled in a stepwise manner. The transformation temperatures are estimated from changes in the intensities of the (110)α and (111)γ peaks as a function of temperature. The time evolution of the microstructure resulting from isothermal heat treatments at temperatures between 800 and 1000 °C applied after cooling from 1050 °C is followed by quantitative metallography on samples quenched into water. The results show that, on cooling, formation of ferrite starts at about 950 °C and ends at 790 °C, indicating a strong effect of Si and Al on the austenite to ferrite and eutectoid transformations. These results suggest that the low tensile ductility exhibited by this material at temperatures near 1000 °C can be attributed to strain localization in strain-induced ferrite formed at temperatures as high as 1025 °C.