alpha’-martensite formation during cooling of cold-worked and aged AISI type 304 stainless steel has been studied by an acoustic emission technique. The ageing was carried out at 673 K for 1 h. A substantial amount of acoustic emission generated du ring cooling of cold-worked and aged AISI 304 stainless steel specimens com pared to negligible acoustic emission observed during cooling (after ageing) of annealed AISI 304, annealed AISI 316 and cold-worked AISI 316 stainless steel specimens, was attributed to the alpha’-martensite formation from cold-worked 304 stainless steel specimens. The extent of martensite formation was relatively higher for 10% and 50% cold-worked specimens and lower for 20%-40% cold-worked specimens. The temperature range of martensite formation, as detected by the acoustic emission technique lies between 603 and 466 K. The formation of alpha’-martensite has been established to occur by a shear process.