The deformation microstructures formed by novel multistage high-temperature thermomechanical treatment (HTMT) and their effect on the mechanical properties of austenitic reactor steel are investigated. It is shown that HTMT with plastic deformation at the temperature decreasing in each stage (1100, 900, and 600 °C with a total strain degree of e = 2) is an effective method for refining the grain structure and increasing the strength of the reactor steel. The structural features of grains, grain boundaries and defective substructure of the steel are studied in two sections (in planes perpendicular to the transverse direction and perpendicular to the normal direction) by Scanning Electron Microscopy with Electron Back-Scatter Diffraction (SEM EBSD) and Transmission Electron Microscopy (TEM). After the multistage HTMT, a fragmented structure is formed with grains elongated along the rolling direction and flattened in the rolling plane. The average grain size decreases from 19.3 µm (for the state after solution treatment) to 1.8 µm. A high density of low-angle boundaries (up to ≈ 80%) is found inside deformed grains. An additional cold deformation (e = 0.3) after the multistage HTMT promotes mechanical twinning within fragmented grains and subgrains. The resulting structural states provide high strength properties of steel: the yield strength increases up to 910 MPa (at 20 °C) and up to 580 MPa (at 650 °C), which is 4.6 and 6.1 times higher than that in the state after solution treatment (ST), respectively. The formation of deformed substructure and the influence of dynamic strain aging at an elevated tensile temperature on the mechanical properties of the steel are discussed. Based on the results obtained, the multistage HTMT used in this study can be applied for increasing the strength of austenitic steels.