The effect of retained austenite stability on impact-abrasion wear resistance was investigated. Using an impact-abrasion wear testing machine, it was demonstrated that a high mechanical stability of retained austenite brought about improved wear resistance in bainite steels. However, the wear resistance worsened when the retained austenite stabilization was sufficient to suppress the transformation of retained austenite to martensite. The retained austenite not only enhanced the hardness of the contact surface, but also resisted crack opening and propagation by deformation and transformation. Furthermore, material removal by microcutting and microcracking were the dominant contributions to mass loss during impact-abrasive wear. Therefore, a wear model was developed based on cutting and fracture mechanisms, and the hardness and fracture toughness were the key factors that dominated the impact-abrasion wear resistance.