This study explores the effect of fast heating annealing (FHA) on the microstructure and mechanical properties of V-microalloyed high-Mn TWIP steel. Cold-rolled sheets were subjected to FA cycles at a heating rate of 200 °C/s over a temperature range of 700–900 °C for 30 s. The microstructures achieved through FHA were characterized using electron backscatter diffraction (EBSD), while mechanical performance was evaluated through uniaxial tensile testing and physically based modeling. FHA at lower temperatures (700–800 °C) promoted partially recrystallized structures, while fully recrystallized ultrafine-grained microstructures were obtained at 850–900 °C. The optimized structure achieved at 850 °C showcased an exceptional strength–ductility balance, with a yield strength of 415 MPa, tensile strength of 850 MPa, and elongation of 60 %, resulting in a high UTS × TE product of 50700 MPa·%. Fractographic analysis revealed ductile failure dominated by dimple formation, with voids nucleated at non-metallic inclusions. Inclusion classification and statistical analysis further identified Al2O3–Mn(S,Se) as the most dominant inclusion type, with complex multiphase clusters also observed, indicating their role in damage initiation. The applied mechanistic modeling and strain-hardening analysis confirmed that dynamic Hall–Petch strengthening, driven by mechanical twinning and grain refinement, significantly enhanced strain hardening and delayed plastic deformation instability. These findings demonstrate that FHA offers a viable, time-efficient processing strategy for tailoring microstructure and optimizing the mechanical performance of high-Mn TWIP steels through controlled recrystallization, twin activation, and precipitation strengthening.