Friction stir welding is one of the new solid state welding methods. Recently, extensive researches have been performed on stainless steel welding using this method. In this research, the effect of the tool rotational and traverse speed on mechanical properties and microstructure of austenitic stainless steel AISI 316 was examined. Plates with dimension of 150×100×2 mm were joined by this method. The rotational speeds were determined to be 630, 800 and 1000 RPM and traverse speeds as 55, 63 and 80 mm/min. Tungsten carbide with conical pin profile with the lower diameter of 5 and upper diameter of 5.5mm was used as the tool metal. During the studies, the tool angle of 0° was kept constant. Full penetrated and defect-free butt welded joints were successfully produced, under all applied welding conditions. In order to study mechanical properties, the tensile, impact and hardness tests were performed and in order to study microstructure, optical microscope and scanning electron microscope were used. The joints showed a higher tensile strength, yield strength and hardness than the base metal. The impact test results showed that this method reduce the impact property of metal and with increasing of traverse and rotational speeds, fracture energy has reduced. The hardness test results showed that this mechanical property has been improved and with increasing traverse and rotational speeds, the hardness increased, too. Study of tensile test results showed the improvement of yield and tensile strengths. Increasing rotational and traverse speed, the yield and tensile strengths have increased first and decreased finally. Metallurgical tests showed that the friction stir welding improved the microstructure and made the grains forming austenitic phase smaller and has improved the metallurgical properties. Improving the microstructure has improved the hardness, tensile strength and yield strength properties, too. In the stir zone of the austenitic stainless steel, a refined grain structure with some features of dynamic recrystallization was evidenced. Also intermetallic compounds and their effects on the mechanical properties of the joints were investigated. Response surface method has used for analyzing hardness, tensile and yield strength and fracture energy test results. The response surface method helps for predicting the test results and analysis the results with increasing the tool rotational and traverse speed at the same time and also helps for determining the mechanical property that the welding parameters have the most effect on it. Mechanical tests analysis using the response surface method showed that increasing rotational and traverse speed, has reduced the tensile strength and fracture energy of specimens but has improved the hardness. Response surface method analysis showed that the effect of the tool rotational and traverse speed on the hardness is more than fracture energy, tensile strength and yield strength. Keywords: Friction stir welding, Stainless steel, Traverse and rotational speed, Mechanical and metallurgical properties.