Fretting fatigue behavior of the sensitized SUS304 stainless steel under a pressurized hot water at 7.3MPa and 288°C was investigated. The tests were carried out under a contact pressure of 100MPa and a frequency of 20Hz. From the experimental result, combined effect of pressurized hot water and localized high tangential stress due to fretting resulted in nucleation of intergranular crack along the outer edge of contact region at lower stress amplitudes, while a fretting fatigue crack was nucleated at the highest tangential force point independently from these intergranular cracks at higher stress amplitudes. No intergranular crack nucleation was observed for fretting fatigue at the same temperature in air. The higher stress ratio reduced the fatigue strength, where the crack tip was exposed more in corrosive environment due to the high mean stress compared to the lower stress ratio.