Substructure development in an austenitic Ni-30%Fe model alloy was investigated within a dynamic recrystallization (DRX) regime. The substructure characteristics of the deformed matrix and DRX grains were markedly different regardless of the grain size and orientation. The former largely displayed 'organized', banded subgrain arrangements with alternating misorientations, resulting from a limited number of active slip systems. In contrast, the substructure of DRX grains was generally more 'random' and exhibited complex subgrain/cell arrangements characterized by local accumulation of misorientations, suggesting multiple slip. The proposed mechanism of the unique substructure development within DRX grains suggests that the DRX nuclei, forming along pre-existing grain boundaries and triple points, essentially represent grain boundary regions, which experience multiple slip to preserve the compatibility with neighbouring deformed grains. This results in the formation of a complex cell/subgrain structure, which progressively extends as the grain boundary regions expand outwards during DRX growth.