Ultrafine-grained (UFG) high-Mn austenitic steel exhibited unusual discontinuous yielding on its stress-strain curve, characterized by a yield drop followed by a stress plateau, indicative of Lüders deformation. Utilizing the digital image correlation (DIC) technique, a strain-localized region known as a Lüders band was observed to propagate during Lüders deformation. Following microstructural observations using state-of-the-art techniques such as in-situ synchrotron XRD measurement during the tensile test and ex-situ S/TEM and SEM-ECCI, dislocation multiplication, rather than twinning, was theoretically identified as the primary deformation mechanism responsible for the unusual Lüders deformation in UFG high-Mn austenitic steel.