A 304 austenitic stainless steel was friction stir welded using polycrystalline cubic boron nitride (PCBN) tool. Relationship between corrosion properties and microstructure was examined in the weld using several corrosion tests and microstructural observation techniques. The stir zone (SZ) had better corrosion properties than the base material (BM). The corrosion tests showed that the intergranular corrosion was developed in the heat-affected zone (HAZ) compared to the BM and SZ although the grain boundaries were not severely corroded. TEM/EDS analysis revealed that Cr depletion zone near grain boundary in the HAZ was shallow and narrow. Friction stir welding (FSW) suppressed sensitisation in the HAZ, which could be explained by short duration at sensitisation temperatures during welding. On the other hand, many grain boundaries were deeply corroded in the AS, where the corrosion resistance was significantly degraded. The microstructural observation revealed that sigma phase was formed in the AS during FSW. Sigma formation produced the wide and deep Cr depletion zone with the minimum Cr content less than 12 wt % in the vicinity of the grain boundary in the AS, which severely deteriorated the corrosion resistance in the AS.