The characteristics of microstructures in friction stir (FS) weld of 304 austenitic stainless steel were examined. The stir zone (SZ) and thermomechanically affected zone (TMAZ) showed dynamically recrystallized and recovered microstructures, respectively. The hardness of the SZ was higher than that of the base material and the maximum hardness was located in the TMAZ. The higher hardness in TMAZ was attributed to high density of dislocations and sub-boundaries. Electron microscopic observations revealed that ferrite and sigma phases were formed in austenite matrix in the SZ during friction stir welding (FSW).