In the present study, we investigated the austenite stability of a sintered Fe-based nanocrystalline alloy. The volume fraction of austenite was measured based on the X-ray diffraction data of sintered Fe-based nanocrystalline alloys, which were prepared by high-energy ball milling and spark plasma sintering. The sintered alloy samples showed a higher volume fraction of austenite at room temperature as compared to the equilibrium volume fraction of austenite obtained using thermodynamic calculations, which resulted from the nanosized crystalline structure of the sintered alloy. It was proved that the austenite stability of the sintered Fe-based alloy increased with a rise in the amount of austenite stabilizing elements such as Mn, Ni, and C; however, it increased more effectively with a decrease in the actual grain size. Furthermore, we proposed a new equation to predict the martensite starting temperature for sintered Fe-based alloys.