The effect of warm deformation on the microstructure and mechanical properties of cold-deformed AISI 316 type austenitic steel is investigated. It is shown that cold deformation with a strain degree of ≈55% leads to the formation of a microtwin structure, with an average size of microtwin plates of ≈30 nm. Subsequent warm deformation (≈20%) with heating up to 600°C promotes the formation of localized deformation bands within the microtwin structure. The volume fraction of the localized deformation bands is ≈10%, and their width does not exceed 150 nm. These features of the microstructure provide high strength properties: yield strength ≈1000 MPa, with an elongation to failure of ≈10%.