Extended defects in crystalline solids such as dislocations, grain boundaries, stacking faults, and deformation twins may cause atomic structural rearrangement and solute re-distribution, alter phase equilibria and change phase transformation behavior. If the extended defects are generated during deformation, dynamic phase transformations may occur at these defects, which will alter the deformation pathway and hence impact significantly the mechanical properties. In this presentation, we show that by using a combination of crystallographic analysis, ab initio calculations of the generalized stacking fault (GSF) energy and interaction energy between solute and the extended defects, segregation isotherm, thermodynamic modeling, and microscopic phase field simulations, one can predict (a) structures of these extended defects; (b) solute segregation and segregation transition at these defects; (c) localized phase transformation (LPT) at these defects. The LPT is found to either strengthen or soften the alloy during deformation and a new design strategy based on the relative stability of ordered and disordered localized phases is established for the next-generation LPT-strengthened superalloys.