Friction stir welding (FSW) was applied for the joining of 3-mm-thick AISI 316L stainless steel sheets. The investigation was aimed to explore the relationship between weld joint characteristics and one of the very important primary FSW parameters, the welding speed. The soundness of the fabricated joints was tested by x-ray radiography technique initially. The microstructural studies of the joints were carried out using scanning electron microscopy (SEM), transmission electron microscopy (TEM) and electron back scattered diffraction (EBSD). Discontinuous dynamic recrystallization was the suggestive dominant recrystallization mechanism in the weld stir zone (SZ). The presence of fine equiaxed austenite grain boundaries and the consequent increase in hardness at the weld SZ resulted in joint strength superior to that of the base steel at higher welding speeds. But, at lower welding speeds, the evolution of delta ferrite decreased the toughness and strength of the joints owing to higher heat generation (higher peak temperature). However, the delta ferrite formed in the weld SZ has not transformed into sigma phase, probably due to fast cooling of the weld zone.