In-phase thermomechanical fatigue tests with various mechanical strain amplitudes (0.6% to 1.2%) at temperature interval of 250–450 °C were carried out on 316LN austenitic stainless steel. The principal deformation and damage mechanisms include dynamic strain aging (DSA) and oxidation. The operation temperature range of DSA is about 400–600 °C determined by monotonic tensile tests. The distinct serrated flow in hysteresis loops and significant cyclic hardening are representative manifestations of the occurrence of DSA which promotes formation of well-developed planar slip bands and intense persistent slip markings (PSMs) characterized by surface extrusions and intrusions. Conspicuously localized oxidation at sensitive grain boundaries and along PSMs is observed with an iron oxide composition. Moreover, the degree of oxidation is positively correlated to strain amplitude. The oxidation plays a significant role in microcrack nucleation and growth which is further enhanced by the strong interaction between oxidation and DSA. The oxidation-assisted intergranular cracking is controlled jointly by a combination of effects including thermal mismatch, slip bands impingement and deformation incompatibility while two different types of transgranular cracks along oxidized PSMs are proposed depending on the particular locations where brittle oxide cracking occurs.