The deformation microstructure of austenitic Fe-18Cr-(10-12)Ni (wt pct) alloys with low stacking fault energies, estimated by first-principles calculations, was investigated after cold rolling. The E >-martensite was found to play a key role in the nucleation of alpha'-martensite, and at low SFE, E > formation is frequent and facilitates nucleation of alpha' at individual shear bands, whereas shear band intersections become the dominant nucleation sites for alpha' when SFE increases and mechanical twinning becomes frequent.