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Rare-earth-free permanent magnet materials based on Mn show great promise for applications in electric motors and devices. The metastable ferromagnetic τ phase of the Mn-Al system has magnetic properties between those of the high-performance Nd-Fe-B magnets and the lower-performance ferrite magnets. However, the hybrid displacive-diffusional pathway of τ formation, from the parent ε phase through the intermediary ε’ phase, is still not fully understood. This phase transformation progression was studied in-situ using diffractive, calorimetric, and magnetometric techniques to show that the progression from ε to τ in Mn54Al46 at <450 ◦C involves the ordering of ε into ε’. Density functional theory calculations were performed on each phase and confirmed the experimental observation that the ε to ε’ to τ pathway is energetically favorable. Isothermal annealing of quenched-in ε at 350 ◦C demonstrated that ε’ is ferromagnetic, also in agreement with theoretical results, with a moderate coercivity of at least 50 kA/m. The τ phase was observed to nucleate along the prior ε phase grain boundaries and grow into the ε’ phase regions. A boundary front of ε’ was observed between the τ and ε phases. Both Kissinger and Flynn-Wall-Ozawa methods were used to determine the activation energies for the ε’ and τ phase transformations with values of ~140 kJ/mol obtained for both phases. Therefore, the ordering transformation to ε’ and the hybrid displacive-diffusional transformation to τ were shown to overcome the same magnitude energy barrier. Both activation energies were less than previous τ phase activation energies measured on Mn55Al45 in the absence of a significant ε’ ordering exotherm, providing a kinetic benefit to the ε to ε’ to τ pathway at 350 ◦C. The results of this study give insight into the phase transformation of L10 binary materials as well as materials that undergo a disorder–order transformation followed by displacive shear.