The influence of Gd additions on the microstructure and hardness of type 316L stainless steel was investigated by various microstructural characterization techniques. This work was conducted as a first step toward the development of Gd-enriched alloys for spent nuclear fuel applications. Small (∼10 g) gas tungsten arc melt buttons were prepared to produce 316L stainless steel with Gd levels from 0.1–10 wt.% Gd. Electron microprobe measurements showed that Gd is essentially insoluble in the austenite/ferrite matrix. All of the alloys formed an interdendritic (Fe, Ni, Cr)3Gd intermetallic, and the amount of the (Fe, Ni, Cr)3Gd phase increased with increasing Gd concentration. Depending on the P and O levels, various amounts of Gd phosphides and oxides were also observed. The relatively high Ni concentration (∼28 wt.% Ni) and low Cr concentration (∼3 wt.% Cr) of the (Fe, Ni, Cr)3Gd phase led to Ni depletion and Cr enrichment in the matrix which, in turn, affected the matrix stability. Alloys with 0.1−6 wt.% Gd exhibited a two-phase ferrite/austenite matrix. Alloys containing 8 and 10 wt.% Gd exhibited a fully ferritic matrix due to extensive Ni depletion/Cr enrichment and concomitant stabilization of ferrite. Hardness increased with increasing Gd concentration due to the formation of the (Fe, Ni, Cr)3Gd intermetallic and the change in matrix structure from austenite to ferrite. A mass balance procedure is presented that accounts for changes to the matrix composition with Gd concentration. This procedure can be used to determine the nominal alloy composition required to produce a 316L-type matrix composition for any Gd level.