The reverse transformation of austenite from pearlite was observed in-situ by using a sophisticated EBSD system. Quantitative information on the nucleation sites and orientation selection of the austenite was obtained. Initially, the nucleation sites were restricted to high-angle grain boundary (HAB) and all the austenite orientations were selected by Kurdjumov-Sachs (K-S) orientation relationship. Latterly, the constraints were relaxed as new nucleation sites were involved. The γ growth was preferentially into the pearlite grains without K-S relation. Nucleation and growth at HAB edge may contribute to γ coarse grains, whereas nucleation at pre-existing γ boundary is important to grain refinement of γ structure.