In this study, in order to accelerate the diffusion of nitrogen into austenitic stainless steel, fine particle peening (FPP) was introduced prior to gas nitriding. The effects of the FPP treatment on gas nitriding behavior, and consequent corrosion and fatigue properties of austenitic stainless steel (SUS316) were evaluated. Gas nitriding was performed at 400°C, 475°C and 550°C. The microstructural characteristics of the treated specimens were examined using a micro-Vickers hardness tester, optical microscope, scanning electron microscope (SEM), Glow discharge optical emission spectrometry (GD-OES), X-ray photoelectron spectroscopy (XPS) and X-ray diffraction (XRD). It was revealed that nitrided layer was formed on the FPP-treated surface although passive film existed at the surface. This was because nitrogen diffused into the material through the transferred particles on the surface during the subsequent gas nitriding process. In order to evaluate the corrosion resistance, electrochemical corrosion tests were performed. The specimen nitrided at 400°C showed highest corrosion resistance due to the existence of an S-phase. Fatigue tests were also performed at room temperature using a rotational bending fatigue testing machine. The nitrided specimens pre-treated with FPP showed the higher fatigue strength compared with single surface treated specimens.