The microstructural development of a forged Ti-43Al-4Nb-1Mo-0.1B (in at%) alloy during two-step heat-treatments was investigated and its impact on the tensile ductility at room temperature was analyzed. The investigated material, a so-called TNM™ gamma alloy, solidifies via the β-route, exhibits an adjustable β/B2-phase volume fraction and can be forged under near conventional conditions. Post-forging heat-treatments can be applied to achieve moderate to near zero volume fractions of β/B2-phase allowing for a controlled adjustment of the mechanical properties. The first step of the heat-treatment minimizes the β/B2-phase and adjusts the size of the α-grains, which are a precursor to the lamellar γ/α2-colonies. However, due to air cooling after the first annealing step, the resulting microstructure is far from thermodynamic equilibrium. Therefore, a second heat-treatment step is conducted below the eutectoid temperature which brings the microstructural constituents closer to thermodynamic equilibrium. It was found that temperature and duration of the second heat-treatment step critically affect the solid-state phase transformations and, thus, control the plastic fracture strain at room temperature. Scanning and transmission electron microscopy studies as well as hardness tests have been conducted to characterize the multi-phase microstructure and to study its correlation to the observed room temperature ductility.