The effect of test temperature, which controls the stability of austenite, on the impact toughness of a low carbon Fe-Ni-Mn-C austenitic steel and 304 stainless steel, has been investigated. Under impact conditions, stress-induced martensitic transformation occurred, in a region near the fracture surface, at test temperatures below 80degreesC for the Fe-Ni-Mn-C steel and below -25degreesC for 304 stainless steel. The former shows significant transformation toughening and the highest impact toughness was obtained at 10degreesC, which corresponds to the maximum amount of martensite formed by stress-induced transformation above the Ms temperature. The stress-induced martensitic transformation contributes negatively to the impact toughness in the 304 stainless steel. Increasing the amount of stress-induced transformation to martensite, lowered the impact toughness. The experimental results can be well explained by the Antolovich theory through the analysis of metallography and fractography. The different effect of stress-induced transformation on the impact toughness in Fe-Ni-Mn-C steel and 304 stainless steel has been further understood by applying the crystallographic model for stress-induced martensitic transformation to these two steels.