Abstract: A theory recently developed by the present authors is applied to the study of the effect of elastic energy due to atomic size factor on the transformation behaviour of binary solid solutions. lt is found that elastic interaction energy (EIE), which is a part of the total elastic energy plays a key role in both ordering elastic interaction ordering (EIO) and spinodal decomposition. The present study gives a reasonable explanation to the historical dilemmas, "elastic energy paradox" and "atomic size factor paradox . By solving these confusing problems, the coexistence of ordering (EIO) and decomposition, which has been regarded as impossible by conventional theories. can be well understood. The mechanism is as follows: lowering of elastic energy demands EIO, and such an ordering provides a driving force for spinodal decomposition. Therefore, in alloys with large atomic size factor, spinodal decomposition is preceded and induced by ordering. Ordering and spinodal decomposition are thus closely related processes to each other