The effects of martensitic transformation on the coaxing behavior were studied in austenitic stainless steels. The materials used were austenitic stainless steels, type 304 and 316. Conventional fatigue tests and stress-incremental fatigue tests were performed using specimens subjected to several tensile prestrains from 5% to 60%. Under conventional tests, the fatigue strengths of both steels increased with increasing prestrain. Under stress-incremental tests, 304 steel showed a marked coaxing effect, where the failure stress significantly increased irrespective of prestrain level. On the other hand, the coaxing effect in 316 steel decreased with increasing prestrain up to 15%, where the failure stresses were nearly the same. Above this prestrain level, the coaxing effect increased with increasing prestrain. In 304 steel, the coaxing effect is primarily dominated by work hardening at low prestrains, while the effect of strain-induced martensitic transformation increases with increasing prestrain. The coaxing effect in 316 steel is dominated by both work hardening and strain aging at low prestrains, but strain-induced martensitic transformation could play a significant role at high prestrains.