This research evaluated the effect of nitrogen absorption into austenitic stainless steel in selective laser melting (SLM) process. Microstructures and mechanical properties of SUS316 specimens fabricated by SLM in different atmosphere, nitrogen and argon, were investigated. The results of microscopy observation of as-built specimen fabricated in nitrogen showed a fine cellular microstructure. In contrast, coarse columnar grains grew up from melt pool boundaries were observed in the microstructure of as-built specimen fabricated in argon. The ultimate tensile strength, yield strength and hardness of as-built specimen in nitrogen were considerably higher than those of specimen in argon and conventionally processed material. These were considered to be the cause of the difference in microstructures and nitrogen absorption. Post-SLM solution heat treatment (SHT) reduced the tensile strength and hardness of both specimens and improved their ductility. However, the tensile strength and hardness of the specimen in nitrogen were still higher than those in argon.