The widespread use and development of inertia friction welding is currently restricted by an incomplete understanding of the deformation mechanisms and microstructure evolution during the process. Understanding phase transformations and lattice strains during inertia friction welding is essential for the development of robust numerical models capable of determining optimized process parameters and reducing the requirement for costly experimental trials. A unique compact rig has been designed and used in-situ with a high-speed synchrotron X-ray diffraction instrument to investigate the microstructure evolution during inertia friction welding of a high-carbon steel (BS1407). At the contact interface, the transformation from ferrite to austenite was captured in great detail, allowing for analysis of the phase fractions during the process. Measurement of the thermal response of the weld reveals that the transformation to austenite occurs 230 °C below the equilibrium start temperature of 725 °C. It is concluded that the localization of large strains around the contact interface produced as the specimens deform assists this non-equilibrium phase transformation.