The microstructural evolution of and simultaneous dimensional changes in high-carbon SAE 52100 bearing steel were monitored continuously during austempering for 120 min at selected temperatures in the range of 210 °C–270 °C, and also during its subsequent tempering to 340 °C for an additional 120 min, via high-energy X-ray diffraction in real time and in-situ dilatometry. The austenite-to-bainitic ferrite transformation induces lattice defects and internal lattice stresses that increase with austempering time and at lower austempering temperatures. These changes are evidenced by the increase in the full-width half-maximum of the relevant reflections in X-ray diffraction. The lattice parameter of bainitic ferrite takes its highest value during the early stages of austempering, and then gradually decreases as the transformation progresses. This observation points to an initial state of carbon supersaturation in the ferritic lattice that is likely reducing due to carbon segregation close to dislocations, fine carbide precipitation within the bainitic ferrite, and carbon partitioning into the surrounding austenite. The carbon partitioning into austenite is evidenced in particular at the higher austempering temperatures of 240 °C and 270 °C, at which there is a noticeable increase in the lattice parameter of the remaining austenite at longer times. The dimensions of the bearing steel specimens are governed by the volume change due to the formation of bainitic ferrite during austempering and by the relaxation of its lattice distortion during tempering at 340 °C in the absence of further phase transformation.