The thermo-mechanical stability and oxidation behavior of S-phase are critical issues for some industrial applications at elevated temperatures owing to its metastable nature. In this study, the stability and oxidation behavior of carbon S-phase generated by plasma carburizing on AISI316 under both thermal and mechanical conditions was investigated for the first time. The experimental results demonstrate that when tested at a fixed temperature the thickness of the carbon S-phase layer increased with the stress applied to the tensile specimens during the thermo-mechanical stability tests. This indicates that tensile stress promotes the diffusion of carbon in the carbon-S-phase. The oxidation resistance of the carbon S-phase at 500°C is inferior to untreated AISI 316, which further deteriorated under tensile stress. The lattice expansion and high density of crystal defects in the S-phase and the applied tensile stress would facilitate the diffusion of oxygen and iron, thus promoting oxidation.