Cavitation erosion behavior of 316L was investigated mainly in terms of its microstructural and mechanical factors. The cavitation erosion resistance (Re) was defined with the consideration of evolutionary tendency of the erosion rate. Morphology evolution of the eroded surface was observed by scanning electron microscopy. Early microstructure evolution of the etched surface was analyzed by optical microscopy, video microscopy and 3D measuring laser microscopy. The erosion mechanism was discussed as well. The analysis showed that the initial damage initiated from the grain boundary and slip lines inside grains, and that penetration slip lines were found across grains. Evolution of roughness, residual stress, and hardness of the eroded material and the effect of the evolution on Re were discussed. Results indicated that residual stress and roughness were inversely proportional to Re of 316L, hardness tended to be proportional to Re, and the residual stress induced by cavitation impact load influenced the hardness test.