The study thoroughly investigated the hot deformation behavior and microstructure evolution of superaustenitic stainless steel S31254. Hot compression tests were conducted at temperatures ranging from 950 °C to 1200 °C and strain rates of 0.01–10 s−1. The flow behavior of S31254 is influenced by adiabatic heating, particularly at high strain rates. The critical conditions of dynamic recrystallization for various deformation conditions were calculated based on the “double differential method.” An rise in deformation temperature or a reduction in strain rate reduces critical stress. Using the Arrhenius equation and Zener-Hollomon parameter to represent the deformation parameters, a linear connection between peak stress and dynamic recrystallization critical conditions was determined. Electron backscattering diffraction and transmission electron microscopy were used to characterize the microstructure under various deformation conditions. The dynamic softening of superaustenitic stainless steel is mainly achieved through dynamic recrystallization. The recrystallized grains are driven by distorted energy to nucleate preferentially at high-angle grain boundaries and grow towards high misorientations. Discontinuous dynamic recrystallization characterized by grain boundary bowing out is the main recrystallization mechanism in S31254. However, at high temperatures and low strain rates (1200 °C, 0.01 s−1), the dynamic recrystallization process shifts from discontinuous to continuous, with subgrain coalescence serving as the nucleating mode.