The isothermal formation of martensite in a 71 pet Fe# 29 pet Ni alloy is found to take place mainly by the nucleation of new plates rather than by the growth of existing ones# and is dependent on the temperature and time of the isothermal hold, the amount of athermal martensite present, the state of internal strain, and the application of tensile stress. The conclusion is reached that the isothermal nucleation is activated by thermal fluctuations superimposed on localized regions of very high strain. The reaction-path concept, involving martensite nucleation at strain embryos by athermal activation on cooling, or by thermal fluctuations on holding, re-conciles the athermal and isothermal modes of transformation, and offers a unified picture of the kinetics of martensite formation.