In this research, the effect of nanograins on nitrogen diffusivity in AISI 321 stainless steel during plasma nitriding has been studied. The repetitive cold rolling and subsequent annealing were conducted to achieve nano/ultrafine grains in AISI 321 stainless steel. Pulsed DC plasma nitriding was performed for grain size in the range of 0.13-45 µm at temperatures of 400-500 °C. Structural transformations were analyzed using ferritscope and X-ray diffractometer. Microstructural evaluations were also conducted by Optical Microscopy (OM), Scanning Electron Microscopy (SEM) and Transmission Electron Microscopy (TEM). Energy Disperse Spectroscopy (EDS) was applied to identify secondary phase modality. The composition and the structure of the nitrided layer (S phase) were characterized by Glow Discharge Optical Emission Spectroscopy (GDOES) and X-ray Diffraction (XRD) method. Mechanical properties of the S phase was evaluated by microhardness testing. Results indicated that, titanium carbide precipitations as the secondary phase in AISI 321 steel facilate the martensite formation. Microstructural evaluations demonstrated that, after plasma nitriding, the nitrided layer of the nanostructured steel have uniform appearance with no CrN precipitates, while CrN precipitations were formed in nitrided layer of the micrograin ones. GDOES analysis revealed that, increasing austenite grain size from 130nm up to 45µm, caused to increase surface nitrogen concentration in nitride layer. Decreasing austenite grain size led to decreases the S phase thickness, while the nitrogen diffusion mechanism is the same. Keywords: austenitic stainless steel, nano/ultrafine grain structure, thermo-mechanical treatment, plasma nitriding, nitrogen diffusivity.