Recrystallization and grain growth were studied in an austenitic stainless steel 316LVM processed by hydrostatic extrusion (HE) to a total true strain of 2. HE processing produces in this material the microstructure which consists of nanoscale twins on average 19 nm in width and 168 nm in length. The samples after HE were annealed at various temperatures for 1 hour. The structural changes were investigated using TEM. The heat induced changes in nanotwinned austenitic steel are significantly different when compared to the ones in a conventionally deformed material. Microstructural changes take place at lower annealing temperature. Annealing at 600°C brings about a partial a nanostructure reorganization into nanograin of average size 54 nm. An uniform microstructure with nanograins of 68 nm in equivalent diameter was obtained after annealing at 700°C whereas conventional 316LVM steel fully recrystallizes after annealing at 900°C for 1h. Annealing at higher temperatures results in grain growth.