The stress-induced phase transformation in incompressible materials and the interfacial stability of multi-phase deformation were studied. The existence of multi-phase deformation was determined through exploring whether the material would lose the strong ellipticity at some deformation gradient.Then, according to the stability criterion which is based on a quasi-static approach, the stability of the multi-phase deformation in incompressible materials was investigated by studying the growth/decay behaviour of the interface in the undeformed configuration when it is perturbed. At last, the way to define multi-phase deformation in incompressible materials was concluded and testified by a corresponding numerical example.