Medium manganese (Mn) lightweight steel has gained significant attention in the last decade due to its excellent mechanical properties and low mass density. This type of high-strength steel usually shows a complex microstructure composed of banded δ-ferrite and α-ferrite-austenite aggregates along the rolling direction. The mechanical response of such banded microstructure under different loading directions is crucial for understanding the forming properties of such steels. In this study, we focus on the anisotropic deformation behavior of a medium-Mn lightweight steel, employing various in-situ characterization techniques including synchrotron high-energy X-ray diffraction and high-resolution microscopic digital image correlation to study the evolution of stress/strain in different phases upon loading. We observe that the sample loaded along the rolling direction (parallel to the banding direction) exhibits a notably higher strain hardening capability compared to specimens loaded along the transverse direction. Such difference is due to the different strain distribution patterns that is dependent on the intrinsic mechanical properties of individual phases as well as on the orientation of the layered microstructure relative to the loading direction. This factor results in different kinetics of strain-induced martensitic transformation (i.e., varying transformation-induced plasticity effect) in different tensile directions, which explains the observed different tensile responses. Our study provides important insights into the future design of similar alloys, particularly for improved forming properties.