Production of nanostructured high-nitrogen austenitic stainless steel by mechanical alloying was investigated. The effect of alloying time and atmosphere on the room temp temperature ? to g transformation in Fe-18Cr-11Mn powder mixture was evaluated too. It was observed that the amount of nitrogen absorption increases by containing 0.65 wt% nitrogen was produced after 100 hours of milling. While ? phase is stable up to 100 th hour of milling under Ar atmosphere, and the ? phase nucleates after 120 hours of milling. The structure of the produced steel under both atmospheres was in the range of nanometer. The minimum grain size obtained by milling under N 2 atmosphere was smaller than Ar atmosphere. The X-Ray Diffraction patterns showed that austenit is formed after 90% of the matrix became amorphous and the grain size reached to 10 nm. The results showed that the strain of the powder blend decreases by nucleation and growth of the austenite grains. After completion of ? to g transformation, the mechanical alloying causes to grain growth of the ? phase. The heat treatment of the produced high-nitrogen steel showed that it has a high thermal stability, and the amount of nitrogen before and after heat treatment is constant. Also the possibility of Mn replacement by N was investigated. The results showed that it is possible to reduce the amount of Mn in the structure up to 8 weight percent.