During high-cycle-fatigue loading of metastable austenitic steel AISI304L, the elastic anisotropy between neighboring grains causes the occurrence of stress peaks at grain boundaries, which again act as crack nucleation sites. This is in particular the case at twin boundaries. Cyclic crack tip plasticity leads to a transformation from austenite to ´ martensite when different slip bands are activated, alternating during their operation. By means of in-situ fatigue testing in a scanning electron microscope (SEM) in combination with electron back-scattered diffraction (EBSD), the distributions of grain size, geometry, and crystallographic orientation relationship were correlated with the local occurrence of slip, martensite formation and fatigue-crack initiation and propagation. It was shown that the extent of martensite formation ahead of a propagating crack increases with increasing crack length and eventually, due to its higher specific volume, gives rise to transformation-induced crack-closure effects. The variation in the crack-propagation rate depending on the local microstructure was simulated by means of a short crack model, where the displacement fields within the crack, the adjacent plastic zone and the grain boundaries in combination with the martensite volume increase strain are superimposed by means of a boundary-element approach.