Argon atomised austenitic stainless steel (AISI 304) powder was characterized for its physical properties such as particle shape, microstructure, median particle size, particle size distribution, apparent density, tap density, and jlowrate. Subsequently, the tap density of the as received powder was improved to the desired level by adjusting the powder distribution followed by mixing and blending. This powder was subjected to hot isostatic pressing (hipping) at two different combinations of temperature and pressure to optimise the microstructure and mechanical properties. Mechanical properties of the stainless steel obtained by the powder metallurgy (PM) hipping route were found to be superior to those of conventionally processed wrought steel. The superior performance of PM hipped steel is attributed to its low oxygen content, fine grain size, and high degree of chemical homogeneity. Although the production of billets by the hipping route does not appear to be economical owing to the high capital cost of the hot isostatic press, the added advantage of obtaining a nearnet shape makes the process economically viable for production of intricate shapes.